Hanover Fence Produces Custom Wrought Iron Fencing Hanover Considers the Balance of Manufacturing Overhead to Be Immaterial

question 16

Multiple Choice

Hanover Fence produces custom wrought iron fencing. At the end of 2013, the account balances indicated the following: $$\begin{array} { l r } \text { Raw Materials Inventory } & \$ 18,000 \\\text { Work in Process Inventory } & 74,000 \\\text { Finished Goods Inventory } & 42,000 \\\text { Cost of Goods Sold } & 384,000 \\\text { Manufacturing Overhead (credit balance) } & 8,000\end{array}$$ Hanover considers the balance of manufacturing overhead to be immaterial. How much will Hanover Fence report as Cost of Goods Sold on its income statement for the year ending December 31, 2013?

• A) $376,000
• B) $392,000
• C) $384,000
• D) $382,000

---

Definitions:

Intellectual Capital

Non-physical assets of a company, including human capital, organizational capital, and intellectual property, contributing to the company's value.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets.

Goodwill

An intangible asset that represents the excess value of a company above its tangible assets and liabilities, often arising from factors such as brand reputation, customer relationships, and intellectual property.