Alvardo Inc

question 135

Essay

Alvardo Inc.has provided the following data for the month of November.There were no beginning inventories;consequently,the direct materials,direct labor,and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was underapplied by $6,000.

The company allocates any underapplied or overapplied manufacturing overhead among work in process,finished goods,and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.

Required:

Determine the cost of work in process,finished goods,and cost of goods sold AFTER allocation of the underapplied or overapplied manufacturing overhead for the period.

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Definitions:

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.

Differential Revenue

The additional revenue generated from choosing one alternative over another in decision-making processes.

Domestic Unit Sales

The quantity of product units sold within a company's home country.

Variable Manufacturing Costs

Costs that fluctuate with the level of production output, including expenses such as raw materials and labor.