Superior Company provided the following account balances for the year ended Dece
ID: 2420678 • Letter: S
Question
Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
The total manufacturing costs for the year were $685,000; 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 $39,000. The company’s overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.
Prepare a schedule of cost of goods sold.
Prepare an income statement for the year.
Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
Explanation / Answer
SUPERIOR COMPANY Cost of goods Manufactured Direct Material Raw material inventory,Beginning $ 51,000.00 Add:Purchase of raw mateial $ 269,000.00 Raw Material available for use $ 320,000.00 Less: Raw material inventory,Ending $ 35,000.00 Raw Material used in production $ 285,000.00 Direct Labour $ 65,000.00 Manufacturing Overhead $ 335,000.00 Total Manufacturing Cost $ 685,000.00 Add:WIP Opening Inventory $ 44,000.00 Lesss: WIP Ending Inventory $ 28,000.00 Cost of goods Manufactured $ 701,000.00 Cost of goods sold Finished goods,inventory beginning $ 34,000.00 Add:Cost of goods manufactured $ 701,000.00 Goods available for sale $ 735,000.00 Less:Finished goods,inventory ending $ 66,000.00 Cost of goods sold $ 669,000.00 Income Statement Sales $ 1,078,000.00 Less:Cost of goods sold $ 669,000.00 Gross Margin $ 409,000.00 Less:Selling & Administerative Expenses Selling Expenses $ 212,000.00 Administerative expenses $ 158,000.00 Net Operating Income $ 39,000.00
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