Required: Prepare a manufacturing statement for the Superior Company for 2013. T
ID: 2483065 • Letter: R
Question
Required:
Prepare a manufacturing statement for the Superior Company for 2013.
The following information was taken from the accounting records of the Superior Company:
Depreciation of equipment...............................................
$ 70,000
Direct labor.......................................................................
120,000
Factory taxes....................................................................
2,000
Goods in process inventory, Dec. 31, 2013........................
250,000
Indirect labor....................................................................
10,000
Power...............................................................................
16,000
Raw materials inventory, Dec. 31, 2013............................
60,000
Raw materials purchases, for year...................................
230,000
Goods in process inventory, January 1, 2013....................
302,000
Raw materials inventory, January 1, 2013........................
110,000
1. Explain the conceptual difference between total manufacturing costs and cost of goods manufactured.
2. The factory overhead account must be adjusted at the end of an accounting period. Explain why this adjustment is needed and the consequences to the financial statements if the adjustment is not made. .
Depreciation of equipment...............................................
$ 70,000
Direct labor.......................................................................
120,000
Factory taxes....................................................................
2,000
Goods in process inventory, Dec. 31, 2013........................
250,000
Indirect labor....................................................................
10,000
Power...............................................................................
16,000
Raw materials inventory, Dec. 31, 2013............................
60,000
Raw materials purchases, for year...................................
230,000
Goods in process inventory, January 1, 2013....................
302,000
Raw materials inventory, January 1, 2013........................
110,000
Explanation / Answer
Superior Manufacturing Company Manufacturing Statement For the year ended Dec. 31, 2013 Direct Materials Raw material inventory - Jan 1, 2013 110,000 Add: Raw material Purchased 230,000 Raw Material Available for Use 340,000 Less: Raw Material Inventory - Dec 31, 2013 (60,000) Direct material Used 280,000 Direct labor 120,000 Factory Overhead Indirect Labor 10,000 Power 16,000 Factory Taxes 2,000 Dep. On Equipments 70,000 Total Factory overheads 98,000 Total Manufacturing Costs 498,000 Add: Goods in Process - Jan 1, 2013 302,000 Total Goods in process during the year 800,000 less: Goods in process - Dec 31, 2013 (250,000) Cost of Goods Manufactured 550,000 As per Chegg Guidelines, You can ask only one question at a time having four subparts. For other parts or Questions please ask it again.
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