The Hampshire Company Produces 9 Volt Batteries and AAA Batteries

The Hampshire Company produces 9 volt batteries and AAA batteries. The Hampshire Company uses a plant-wide rate to apply overhead based on direct labour hours. The following data is given:
$\begin{array}{|c|c|}\hline \text { Actual overhead } & \$ 325,000 \\\hline \text { Estimated overhead } & \$ 350,000 \\\hline \text { Estimated activity: } & \\\hline \text { 9 volt battery } & 100,000 \quad \text { direct labour hours } \\\hline \text { AAA battery } & 400,000 \text { direct labour hours } \\\hline \text { Actual activity: } & \\\hline 9 \text { volt battery } & 125,000 \quad \text { direct labour hours } \\\hline \text { AAA battery } & 400,000 \quad \text { direct labour hours } \\\hline \text { Units produced: } & \\\hline 9 \text { volt battery } & 500,000 \\\hline \text { AAA battery } & 250,000 \\\hline\end{array}$
-Refer to the figure.If the accounts had the following balances,by how much would cost of goods sold be adjusted? $\begin{array}{|l|l|}\hline \text { Raw materials inventory } & \$ 200,000 \\\hline \text { Work in process inventory } & \$ 100,000 \\\hline \text { Finished goods inventory } & \$ 200,000 \\\hline \text { Cost of goods sold } & \$ 500,000 \\\hline\end{array}$

A) debit $12,500.50
B) debit $21,250
C) credit $26,562.50
D) credit $28,500

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free