Fauxi, Inc. makes and sells Fakes. Manufacturing Overhead is applied based on DL Hours incurred.

- Expected DL Hours for January 2021- 850 DL Hours

- Expected Overhead- $42,500

Beginning and ending inventory balances for January:

Materials Inventory WIP Finished Fakes Inventory

1/1/21 $5,000 $5,000 $5,000

1/31/21 6,000 4,000 6,000

During January of 2021:

- Fauxi, Inc. purchased $30,000 of Materials

- Incurred $18,458 of Direct Labor (839 DL Hours @ $22 per DL Hour)

- Incurred Manufacturing Overhead totaling $40,250

Required:

- What is Cost of Goods Manufactured for January 2021?

- What is Cost of Goods Sold for January 2021 before closing any over/under applied overhead to COGS?

- What is COGS if any over/ under applied overhead is closed to COGS?

- What is Fauxi, Inc.'s January Gross Profit if they sold the finished fakes for $100,000?