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Moira Company Has Just Finished Its First Year of Operations \quad

question 82

Essay

Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold. The company used a predetermined manufacturing overhead rate for its manufacturing operations. The amount that was allocated ($435,000) to work in process was different from the actual amount incurred ($425,000). Following are the respective ending balances in the accounts that contained manufacturing overhead costs:

Work-in-Process \quad \quad $40,000
Finished Goods \quad \quad \quad 80,000
Cost of Goods Sold \quad 680,000

Required:
a. Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts.
b. Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.

Identify the range of output where a monopolist maximizes profit based on marginal cost and demand elasticity.
Analyze how changes in product demand affect a monopolist's pricing and output strategies.
Distinguish the characteristic features of a pure monopolist's demand curve.
Calculate the profit-maximizing level of output and price for a monopolist using demand and cost data.

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