Faughn Corporation Has Provided the Following Data Concerning Manufacturing Overhead

question 138

Multiple Choice

Faughn Corporation has provided the following data concerning manufacturing overhead for July: The company's Cost of Goods Sold was $243,000 prior to closing out its Manufacturing Overhead account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?

• A) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
• B) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $233,000
• C) Manufacturing overhead was overapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000
• D) Manufacturing overhead was underapplied by $10,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $253,000

Determine the cost allocation of lump-sum purchases.

Account for costs subsequent to acquisition including capital improvements and repairs.

Identify and apply the principles of capitalization of interest costs.

Recognize the accounting treatment for the disposal and exchange of property, plant, and equipment.