The cost of goods manufactured for May is:
Cost of goods manufactured is the cost of the goods in all which has been manufactured by the company during the year. It means the cost which relate to the production of goods which has been manufactured by the company during the year in which the finished goods at the beginning or ending are not taken into consideration because in this the costs are to be determined on the goods which has been manufactured.
Given in the question:
Any under or over –applied manufacturing overhead is closed out to cost of goods sold.
Manufacturing overhead cost incurred = $77,000
Manufacturing overhead cost applied to work in process = $75,000
So, there is a difference of $2,000 which is closed out to cost of goods sold.
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