Question

Diane Clothing Co.’s accounts reflect the following:
Cost of Goods Manufactured

$550,000

Beg. Finished Goods Inventory $300,000

End. Finished Goods Inventory $350,000

Cost of Goods Sold ?

Applied overhead $220,500

Actual overhead $200,000

If Sales were $800,000 and the company closes the over/under applied overhead balance to cost of goods sold, how much gross profit would the company report (after the overhead adjustment)?

a. $250,000

b. $279,500

c. $300,000

d. $320,500 

Im having trouble figuring out how to find the gross profit, Ive found that COGS is $500,000

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