Question

The following data from the just completed veat are taken from the corner Company Sales Direct labor cost Raw material purchases Selling expenses $100,000 Administrative expenses Manufacturing overhead applied to work in process%202,000 Actual manufacturing overhead costs $668,000 $ 89,000 $133,000 $ 40,000 $221,000 Inventories Beginning Ending Raw materials $ 8,700 $10,700 Work in process$ 5,700 $20,900 Finished goods $73,000 $25,300 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Assume that the company's underapplied or overapplied overhead is closed to cost of Goods Sold. Make the Journal Entry. 3. Prepare an income statement. 4 pts Label all accounts for credit.

please explain

Answer 1

Solution 1:

Mason Company
Schedule of cost of goods manufactured
Particulars	Details	Amount
Direct Material:
Beginning inventory	$8,700.00
Raw material purchases	$133,000.00
Total Raw material available	$141,700.00
Ending inventory	$10,700.00
Raw material used in production		$131,000.00
Direct Labor		$89,000.00
Manufacturing overhead Applied		$202,000.00
Total manufacturing costs		$422,000.00
Add: Opening WIP		$5,700.00
Total cost of work in process		$427,700.00
Less: ending WIP		$20,900.00
Cost of goods manufactured		$406,800.00

Solution 2:

Journal Entries - Mason Company
Event	Particulars	Debit	Credit
1	Cost of goods sold Dr	$19,000.00
	To Manufacturing overhead		$19,000.00
	(To close underapplied overhead)

Solution 3:

Mason Company
Schedule of cost of goods Sold
Particulars	Amount
Beginning finished goods inventory	$73,000.00
Add: Cost of goods manufactured	$406,800.00
Cost of goods available for sale	$479,800.00
Less: ending finished goods inventory	$25,300.00
Unadjusted cost of goods sold	$454,500.00
Add: Under-applied overhead ($221,000 - $202,000)	$19,000.00
Cost of goods sold	$473,500.00

Mason Company
Income Statement
Particulars	Details	Amount
Sales		$658,000.00
Cost of goods sold		$473,500.00
Gross Profit		$184,500.00
Selling and administrative expenses:
Selling expenses	$100,000.00
Administrative Expenses	$40,000.00	$140,000.00
Net Income		$44,500.00