Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ $ 217,000 262,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ $ $ 159,000 369,000 352,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year End of Year $ 56,000 $ 35,000 .? $ 26,000 $ 30,000 The total manufacturing costs for the year were $670,000, the cost of goods available for sale totaled $750,000, the unadjusted cost of goods sold totaled $668,000; and the net operating income was $39,000. 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.

Answer 1

1) Income statement

Sales		1066000
Cost of goods sold (668000-17000)		651000
Gross profit		415000
Selling and administrative expense
Selling expense	217000
Administrative expense	159000
Total Selling and administrative expense		376000
Net income (loss)		39000

Schedule of cost of goods sold

Beginning finished goods inventory	30000
Add: Cost of goods manufactured	720000
Cost of goods available for sale	750000
Less: Ending finished goods inventory	-82000
Unadjusted cost of goods sold	668000
Less: Over applied overhead	-17000
Adjusted cost of goods sold	651000

Schedule of cost of goods manufactured

Direct material
Beginning raw material	56000
Purchase of raw material	262000
Total raw material available	318000
Less: Ending raw material	-35000
Raw material used in production		283000
Direct labor		18000
Manufacturing overhead		369000
Total manufacturing cost		670000
Beginning work in process		76000
Total work in process		746000
Ending work in process		-26000
Cost of goods manufactured		720000