Before Prorating the Manufacturing Overhead Costs at the End of 2008,the

question 63

Multiple Choice

Before prorating the manufacturing overhead costs at the end of 2008,the Cost of Goods Sold and Finished Goods Inventory had applied overhead costs of $57,500 and $20,000 in them,respectively.There was no Work-in-Process at the beginning or end of 2008.During the year,manufacturing overhead costs of $74,000 were actually incurred.The balance in the Applied Manufacturing Overhead was $77,500 at the end of 2008.If the under or overapplied overhead is prorated between Cost of Goods Sold and the inventory accounts,how much will be allocated to the Finished Goods Inventory?

• A)$903
• B)$1,217
• C)$1,283
• D)$2,597

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, crucial for calculating cost of sales and net income.

Fire Screens

Protective screens placed in front of fireplaces to prevent sparks and embers from escaping into the room.

Retail Values

The total price at which goods or services are sold to the public, inclusive of any markup costs.

Inventory Value

The total cost or market value of all the goods and materials held by a company for the purpose of resale or production.