Lucy Company manufactures a speciality line of skirts. The company uses a job-order costing system. Cost details: Units Produced 5,000 belts Direct materials in the amount of $18,500 The Predetermined overhead rate is $25.00 per machine hour and requires 400 machine hours Selling and General & Administrative expenses are $23,000 for the month By the end of the month, Lucy had sold 4,000 of these skirts and overhead was overapplied by a total of $5,000. The cost of goods sold for the month, computed using the direct method was
| Units produced | 5000 | units | ||||||||
| Particulars | Job | |||||||||
| Direct materials | 18500 | |||||||||
| Overhead | 10000 | OH rate | 25 | per hour | ||||||
| Selling and admin expenses | 23000 | Machine hrs req | 400 | |||||||
| Total | 51500 | |||||||||
| Units completed | 5000 | |||||||||
| Unit product cost | 10.3 | |||||||||
| Units sold | 4000 | |||||||||
| unadjusted cost of goods sold | 41200 | |||||||||
| The cost of goods sold must be adjusted by iver applied overheads | ||||||||||
| unadjusted cost of goods sold | 41200 | |||||||||
| Less : over applied Overheads | -5000 | |||||||||
| Cost of goods sold | 36200 | |||||||||
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