Lily's Cosmetics uses a normal cost system and has the following balances at the end of its first year's operations. WIP inventory Finished-goods inventory Cost of goods sold Actual factory overhead Factory overhead applied $ 248,000 155,000 372,000 415,000 456,000 Requirement 1. Compute cost of goods sold for two different ways to dispose of the year-end overhead balances. By how much would gross profit differ? Begin by computing the cost of goods sold under the immediate write-off method. The adjusted cost of goods sold is $ 331000 Next compute the cost of goods sold under the proration method. Begin by prorating the write-off to each of the appropriate accounts. Unadjusted balances Proration Totals Lily's Cosmetics uses a normal cost system and has the following balances at the end of its first year's operations. WIP inventory Finished-goods inventory Cost of goods sold Actual factory overhead Factory overhead applied $ 248,000 155,000 372,000 415,000 456,000 Requirement 1. Compute cost of goods sold for two different ways to dispose of the year-end overhead balances. By how much would gross profit differ? Begin by computing the cost of goods sold under the immediate write-off method. The adjusted cost of goods sold is $ 331000 Next compute the cost of goods sold under the proration method. Begin by prorating the write-off to each of the appropriate accounts. Unadjusted balances Proration Totals