4 Superior Company provided the following data for the year ended December 31 (a
ID: 2329490 • Letter: 4
Question
4 Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials) 2 points Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 219,000 $ 262,000 Skipped 153, 000 365,000 $ 352,000 eBook Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Print Raw materials Work in process Finished goods $ 55,000 37,000 ? 24,000 $ 33,000 References The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $666,000; and the net operating income was $38,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint. Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)Explanation / Answer
Answer:
1
Superior Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31
Direct materials:
Raw materials inventory, beginning
55000
Add: Purchases of raw materials.
262000
Raw materials available for use ........
317000
Deduct: Raw materials inventory, ending .
37000
Raw materials used in production
280000
Direct labor …
45,000
Manufacturing overhead applied to work in progress
365000
Total manufacturing cost
690,000
Add: beginning Work in process inventory, ending .....
51,000
741,000
Deduct: Work in process inventory, ending .....
24000
Cost of goods manufactured
717,000
Working notes for the above answer:
Direct labor
=690,000-365000-280,000
=45,000
_________________
2
Schedule of cost of goods sold
Beginning Finished goods inventory
33000
Add: cost of goods manufactured
717,000
Cost of goods available for sale
750,000
less: ending finished inventory
84,000
unadjusted cost of goods sold
666000
Less: Overhead applied
13000
Adjusted cost of goods sold
653000
Working notes for the above answer is asunder
Schedule of cost of goods sold:
Less: Over applied overhead ($352,000 – $365,000) = $13,000
__________________________________________________________
3
Superior company
Income statement
Sales
1063000
cost of goods sold
653000
Gross margin
410000
Selling and admin expanses
Selling expanses
219000
Admin expanses
153000
372000
Net operating income
38000
Superior Company
Schedule of Cost of Goods Manufactured
For the Year Ended December 31
Direct materials:
Raw materials inventory, beginning
55000
Add: Purchases of raw materials.
262000
Raw materials available for use ........
317000
Deduct: Raw materials inventory, ending .
37000
Raw materials used in production
280000
Direct labor …
45,000
Manufacturing overhead applied to work in progress
365000
Total manufacturing cost
690,000
Add: beginning Work in process inventory, ending .....
51,000
741,000
Deduct: Work in process inventory, ending .....
24000
Cost of goods manufactured
717,000
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