Superior Company provided the following account balances for the year ended Dece

Question

Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials) $211,000 Selling expenses Purchases of raw materials Direct labor $266,000 $153,000 $334,000 Manufacturing overhead applied to work in process Total actual manufacturing overhead costs 356,000 Inventory balances at the beginning and end of the year were as follows: Year End of Year Raw materials Work in process Finished goods $ 59,000 $39,000 ? $27,000 $ 32,000 The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $730,000, the unadjusted cost of goods sold totaled $662,000; and the net operating income was $31,000 The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Required: a. Prepare a schedule of cost of goods manufactured Answer is not complete. Schedule of Cost Goods Manufactured Direct materials: Raw materials inventory, beginning Add: Purchase of raw materials Raw materials available Less: Raw materials inventory, ending Raw materials used in production 59,000 266,000 325,000 39,000 Direct labor Manufacturing overhead applied to work in process inventory Total manufacturing costs Add: Work in process inventory, beginning 286,000 55,000 334,000 -675.000 44,000 Less: Work in process inventory, ending Cost of goods manufactured 27,000 692,0003

Explanation / Answer

a. Total manufacturing cost = 675000

   Add: work in process, beginning = 50000

less: work in process, ending =    27000

cost of goods manufactured [730000 - 32000] =    698000   

Note:- Cost of goods manufactured

Beginning finished goods = 32000

Add: cost of goods manufactured [730000 - 32000] = 698000

Cost of goods available for sale (given) = 730000

b.   underapplied overhead [$356000 Total actual manufacturing overhead - $334000 applied overhead] = $22000

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