Superior Company provided the following data for the year ended December 31 (all

Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Inventory balances at the beginning and end of the year were as follows:

The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $34,000. 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.)

Selling expenses $ 214,000 Purchases of raw materials $ 264,000 Direct labor ? Administrative expenses $ 156,000 Manufacturing overhead applied to work in process $ 368,000 Actual manufacturing overhead cost $ 354,000

Inventory balances at the beginning and end of the year were as follows:

Beginning of Year End of Year Raw materials $ 55,000 $ 33,000 Work in process ? $ 27,000 Finished goods $ 33,000 ?

The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $34,000. 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

Income statement :

Schedule of cost of goods sold :

Schedule of cost of goods manufactured :

Sales revenue 1059000 Less: Cost of goods sold (669000-14000) 655000 Gross profit 404000 Less: Selling expense 214000 Less: Administrative expense 156000 Net operating income 34000

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