A manufacturing company has the following balances at the end of its first year's operations Sales OMR350,000; actual manufacturing overhead OMR200,000; manufacturing overhead applied OMR114,000; unadjusted costs of goods sold OMR175,000. The costs of goods sold balance includes overhead applied of OMR51,300. Ending Work in process inventory includes overhead applied of OMR34, 700. Ending finished goods inventory includes overhead applied of OMR28,000. These balances are not adjusted for the overapplied or underapplied factory overhead. The company closes year-end manufacturing overhead balances proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. How much is the gross profit for the year after disposing the year-end overhead balances? Select one: O a. OMR89,000 O b. OMR131,800 OC OMR136,30o0 O d. None of the answers given O e OMR213,700 earning System (Academic)E-learning services -SQU Libraries -SQU Portal Attendance English (en)• Omar Al Hashemisserg_fall20Question 6A manufacturing company has the following balances at the end of its first year's operations:Sales OMR350,000; actual manufacturing overhead OMR200,000; manufacturing overheadapplied OMR114,000; unadjusted costs of goods sold OMR175,000. The osts of goods soldbalance includes overhead applied of OMR51,300. Ending Work in process inventory includesNot yetansweredMarked out of0,80overhead applied of OMR34,700. Ending finished goods inventory includes overhead appliedof OMR28,000. These balances are not adjusted for the overapplied or underapplied factoryoverhead. The company closes year-end manufacturing overhead balances proportionally toWork in Process, Finished Goods, and Cost of Goods Sold. How much is the gross profit forthe year after disposing the year-end overhead balances?P Flag questionSelect one:O a. OMR89,000O b. OMR131,800O c. OMR136,300O d. None of the answers givenO e. OMR213,700sain Spring21Next pagePrevious pageTime left 1:24:51

Answered: A manufacturing company has the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A manufacturing company has the following balances at the end of its first year's operations Sales OMR350,000; actual manufacturing overhead OMR200,000; manufacturing overhead applied OMR114,000; unadjusted costs of goods sold OMR175,000. The costs of goods sold balance includes overhead applied of OMR51,300. Ending Work in process inventory includes overhead applied of OMR34, 700. Ending finished goods inventory includes overhead applied of OMR28,000. These balances are not adjusted for the overapplied or underapplied factory overhead. The company closes year-end manufacturing overhead balances proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. How much is the gross profit for the year after disposing the year-end overhead balances? Select one: O a. OMR89,000 O b. OMR131,800 OC OMR136,30o0 O d. None of the answers given O e OMR213,700

Expert Solution

Step 1

Gross Profit = Sales - Unadjusted cost of goods sold - Proportionate actual overheads + Applied overheads

Proportionate actual overheads = Actual overheads x Overheads included in cost of goods sold / Total applied overhead

Step 2

Gross Profit = 350,000 - 175,000 - (51,3000 / 114,000 x 200,000) + 51,300

= 350,000 - 175,000 - 90,000 + 51,300

= 136,300

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