The Brookstone Company Produces 9 Volt Batteries and AAA Batteries

question 17

Multiple Choice

The Brookstone Company produces 9 volt batteries and AAA batteries. The Brookstone Company uses a plantwide rate to apply overhead based on direct labor hours. The following data is given: $$\begin{array} { | l | l | } \hline \text { Actual Overhead } & \$ 325,000 \\\hline \text { Estimated Overhead } & \$ 350,000 \\\hline \text { Estimated Activity: } & \\\hline 9 \text { volt battery } & 100,000 \text { direct labor hours } \\\hline \text { AAA battery } & 400,000 \text { direct labor hours } \\\hline \text { Actual Activity: } & \\\hline 9 \text { volt battery } & 125,000 \text { direct labor hours } \\\hline \text { AAA battery } & 400,000 \text { direct labor hours } \\\hline \text { Units Produced: } & \\\hline 9 \text { volt battery } & 500,000 \\\hline \text { AsA battery } & 250,000 \\\hline\end{array}$$
If the accounts had the following balances, how much will cost of goods sold be adjusted?
$$\begin{array} { | l | l | } \hline \text { Raw M aterials Inventory } & \$ 200,000 \\\hline \text { Work in Frocess Inventory } & \$ 100,000 \\\hline \text { Finished Goods Inventory } & \$ 200,000 \\\hline \text { Cost of Goods Sold } & \$ 500,000 \\\hline\end{array}$$

• A)debit $12,500
• B)debit $21,250
• C)credit $26,562.50
• D)none of these

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