Fletcher Company_under- or over-applied overhead

Fletcher Company disposes of
under- or over-applied overhead at year-end as an
adjustment
to cost of goods sold. Prior to disposal, the firm reported cost of
goods
sold of $590,000 in a year when manufacturing overhead was
under-applied
by $15,000. If sales revenue totaled $1,400,000, determine

(1) Fletcher’s adjusted cost of goods sold and

(2) gross margin.

Adjusted
Cost Gross
Margin
of
Goods Sold
A.
$575,000 $810,000
B.
$575,000 $825,000
C.
$590,000 $810,000
D. $605,000
$795,000
E.
$605,000 $810,000