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 $685,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $664,000; 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.)

Selling expenses $ 219,000 Purchases of raw materials $ 263,000 Direct labor ? Administrative expenses $ 151,000 Manufacturing overhead applied to work in process $ 365,000 Actual manufacturing overhead cost $ 354,000

Explanation / Answer

Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning 50000 Add: Purchases of raw materials 263000 Total raw materials available 313000 Deduct: Raw materials inventory, ending 34000 Raw materials used in production 279000 Direct labor 41000 Manufacturing overhead applied to work in process inventory 365000 Total manufacturing costs 685000 Add: Beginning work in process inventory 59000 744000 Deduct: Ending work in process inventory 26000 Cost of goods manufactured 718000 Schedule of Cost of Goods Sold Finished goods inventory, beginning 32000 Add: Cost of goods manufactured 718000 Cost of goods available for sale 750000 Deduct: Finished goods inventory, ending 86000 Unadjusted cost of goods sold 664000 Less: Overapplied overhead 11000 Adjusted cost of goods sold 653000 Income Statement Sales 1061000 Cost of goods sold 653000 Gross margin . 408000 Selling and administrative expenses: Selling expenses 219000 Administrative expense 151000 370000 Net operating income 38000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.