Reference no: EM132548477

LMS FOR THE WIN Inc. applies factory overhead as follows:

Department            Per Machine hour

Fabricating               10

Spreading                20

Packaging               30

Actual machine hours are:

Fabricating - 2,000 hours

Spreading - 1,500 hours

Packaging - 3,000 hours

The following additional data are provided:

The actual factory overhead expense for the period is 100,000

The ending balances of the inventories and cost of goods sold after the application of overhead are as follows:

Raw materials            200,000

Work in Process         100,000

Finished goods          400,000

Cost of goods sold    500,000

The over/under applied overhead during the period is considered material if at least 30% of actual factory overhead

Required:

Question 1: What is the adjusted cost of goods sold after closing the under/over application of factory overhead?