Please compute the COGS adjusted and explain how to get it on a T$-$accountPROBLEM $3-16$ Comprehensive Problem LO$3-1,$ LO$3-2,$ LO$3-4$

Gold Nest Company of Guandong, China, makes birdcages for the South China market. The com.

pany sells its birdcages through an extensive network of street vendors who receive commissions

on their sales.

The company uses a job$-$order costing system that applies overhead to jobs based on direct

labor cost. Its predetermined overhead rate is based on a cost formula that estimated $$330,000$ of

manufacturing overhead for an estimated activity level of $$200,000$ direct labor dollars. The begin.

ning inventory balances were as follows:

During the year, the following transactions occured:

a$.$ Raw materials purchased on account, $$275,000.$

b$.$ Raw materials used in production, $$280,000($materials costing $$220,000$ were charged

directly to jobs; the remaining materials were indirect$).$

c$.$ Cash paid to employees:

d$.$ Rent for the year, $$18,000($ $$13,000$ related to factory operations, and the remainder related to

selling and administrative activities$).$

e$.$ Utility costs incurred in the factory, $$57,000.$

f$.$ Advertising costs incurred, $$140,000.$

g$.$ Depreciation on equipment, $$100,000($ $$88,000$ related to equipment used in factory opera$-$

tions; the remaining $$12,000$ related to equipment used in selling and administrative activities$).$

h$.$ Manufacturing overhead cost applied to jobs, $

i$.$ Completed goods costing $$675,000$ to manufacture.

j$.$ Sales for the year $($all paid in cash$)$ totaled $$1,250,000.$ The manufacturing cost of these goods

was $$700,000.$