Fletcher Company disposes of under- or overapplied overhead at year-end as an adjustment to cost of goods sold. Prior to disposal, the firm reported cost of goods sold of $590,000 in a year when man

Fletcher Company disposes of under- or overapplied overhead at year-end as an

adjustment to cost of goods sold. Prior to disposal, the firm reported cost of

goods sold of $590,000 in a year when manufacturing overhead was

underapplied by $15,000. If sales revenue totaled $1,400,000, determine (1)

Fletcher’s adjusted cost of goods sold and (2) gross margin.

Adjusted Cost

of Goods Sold

Gross Margin

A. $575,000 $810,000

B. $575,000 $825,000

C. $590,000 $810,000

D. $605,000 $795,000

E. $605,000 $810,000

Leave a Comment