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Sagot :
Answer:
$713,605
Explanation:
If Actual Overheads > Applied Overhead we say, Overheads have been underapplied and the amount of underapplied overheads is added to the balance in stock and cost of sales.
and
If Applied Overheads > Actual Overhead we say, Overheads have been overapplied and the amount of overapplied overheads is deducted from the balance in stock and cost of sales.
Where :
Actual overhead is $201,600 and Applied overhead is $210,000, the amount of overapplied overhead is $8,400 ($210,000 - $201,600).
The overapplied overheads is allocated to ending balances of Finished Goods, Work In Process and Cost of Sales only and except Direct Materials
Total % Allocation
Work-in-process $28,000 3.41 $286
Finished goods $70,000 8.55 $718
Cost of goods $721,000 88.03 $7,395
Total $819,000 100.00 $8,400
Therefore,
Cost of goods sold = $721,000 - $7,395 = $713,605
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