Question

The following data from the just completed year are taken from the accounting records of Mason Company: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs $ 652,000 $ 88,000 $ 139,000 $ 102,000 $ 40,000 $ 203,000 $ 224,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,100 $ 5,500 $ 79,000 Ending $ 10,500 $ 20,300 $25,800 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold 3. Prepare an income statement.

Answer 1

1) Amount Amount Schedule of cost goods manufactured particulars RAW MATERIAL CONSUMED -Opening stock Add: purchases less:Closing stock 8100 139000 10500 Cost of good sold Particulars Cost of goods manufactured Add:opening stock of finished goods less:closing stock of finished goods add:under applied overheads add:sellingexpenses Amount 493400 79000 25800 21000 102000 136600 88000 203000 5500 20300 40000 cost of goods sold ADD:Direct labour cost ADD:Manufacturing overheads applied ADD:Opening W-I-P LESS:Closing W-I-P Administrative expenses 669600 Cost of goods manufactured 493400 Income statement Particulars Sales less.cost of goods sold(shown above) LOSS Amount 652000 669600 -17600