Claycamp Inc

question 28

Essay

Claycamp Inc. uses a job-order costing in which any underapplied or overapplied overhead is closed out to cost of goods sold at the end of the month. The company's cost of goods manufactured for July was $147,000; its beginning finished goods inventory was $43,000; its ending finished goods inventory was $31,000; its manufacturing overhead was underapplied by $5,000.
Required:
Determine the cost of goods sold that would appear on the income statement for July; in other words, determine the cost of goods sold after adjustment for any underapplied or overapplied overhead. Show your work!

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a company, and therefore have a financial interest in its performance.

Cooperative

Organization whose owners join forces to collectively operate all or part of the functions in their business.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity, with all parties sharing the profits, losses, and control of the business.

Mushroom Farm

A specialized agricultural operation focused on cultivating mushrooms under controlled conditions for culinary, medicinal, or commercial purposes.