Question

Cost of Goods Sold $12,600,000 Finished Goods Control $ 2,625,000 Work-in-Process Control $375,000 Dispose of the...

Cost of Goods Sold $12,600,000

Finished Goods Control $ 2,625,000

Work-in-Process Control $375,000

Dispose of the amount using a proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold. Begin by selecting the formula to calculate the adjustment to each account. Then enter the amounts in the formula. Ending Balance x Allocation Rate = Adjustment

COGS =

Finished Goods Control =

Work-in-Progress Control =

What is the allocation rate if original COGS was $12,000,000

Homework Answers

Answer #1

Solution:

1. Ending Balance of COGS = $12,000,000

Adjustment amount in COGS = $12,600,000 - $12,000,000 = $600,000

Now,

Ending Balance x Allocation Rate = Adjustment

$12,000,000 *Allocation Rate = $600,000

Allocation Rate = $600,000 / $12,000,000 = 5%

2. Adjusted amount of Finished Goods Control (105%) = $2,625,000

Allocation Rate = 5%

Adjustment = $2,625,000 *5%/ 105% = $125,000

3. Adjusted amount of Work in process Control (105%) = $375,000

Allocation Rate = 5%

Adjustment = $375,000 *5%/ 105% = $17857.14

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