Question: Pasadena Co uses normal absorption costing Factory overhead is applied

Pasadena Co. uses normal absorption costing. Factory overhead is applied to production at a budgeted rate based on direct labor cost. At the end of the period, there are two unfinished jobs. Additional information is available as follows:
Direct materials used = $90,000
Direct labor = $130,000
Beginning balance of work in process = $120,000
Cost of goods manufactured = $220,000
Finished goods beginning inventory = $70,000
Finished goods ending inventory = $130,000
Factory overhead is overapplied by $80,000
Actual factory overhead = $141,000
Determine the following:
1. The cost of goods sold before disposition of overapplied overhead
2. Ending balance in WIP
3. Budgeted rate for applying factory overhead
4. Assuming the overapplied factory overhead is not prorated, what is adjusted cost of goods sold?

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  • CreatedNovember 19, 2014
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