Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses 219,000 Purchases of raw materials $269,000 Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 156,000 $ 362,000 $352,000 Inventory balances at the beginning and end of the year were as follows: End of Beginning of Year 55,000 Year $33,000 Raw materials Work in process Finished goods 29,000 39,000 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 $662,000; 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.) Complete this question by entering your answers in the tabs below. COGS COGM Income Statement Schedule Schedule Prepare an income statement for the year

Answer 1

Income Statement
Sales		1065000
Cost of goods sold		652000
Gross margin		413000
Selling and administrative expenses:
Selling expenses	219000
Administrative expense	156000	375000
Net operating income		38000
Schedule of Cost of Goods Sold
Finished goods inventory, beginning		39000
Add: Cost of goods manufactured		696000
Cost of goods available for sale		735000
Deduct: Finished goods inventory, ending		73000
Unadjusted cost of goods sold		662000
Less: Overapplied overhead		10000
Adjusted cost of goods sold		652000
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	55000
Add: Purchases of raw materials	269000
Total raw materials available	324000
Deduct: Raw materials inventory, ending	33000
Raw materials used in production		291000
Direct labor		37000
Manufacturing overhead applied to work in process inventory		362000
Total manufacturing costs		690000
Add: Beginning work in process inventory		35000
		725000
Deduct: Ending work in process inventory		29000
Cost of goods manufactured		696000