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Finlon Upholstery, Incorporated, uses a joborder costing system to accumulate manufacturing costs. The company's
workinprocess on December x consisted of one job number which was carried on the yearend balance
sheet at $ There was no finishedgoods inventory on this date.
Finlon applies manufacturing overhead to production on the basis of directlabor cost. The budgeted directlabor cost is
the company's practical capacity, in terms of directlabor hours, multiplied by the budgeted directlabor rate. Budgeted
totals for for direct labor and manufacturing overhead are $ and $ respectively. Actual results
for the year follow.
Job number was completed in January x; there was no work in process at yearend. All jobs produced during
were sold with the exception of job number which contained directmaterial costs of $ and directlabor
charges of $ The company charges any under or overapplied overhead to Cost of Goods Sold.
Would it be appropriate to include selling and administrative expenses in either manufacturing overhead or cost of goods sold?
