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Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement (LO3-3] 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 $ 654,00 $ 85,00 $ 134,000 $ 103,eee $ 40,000 $ 207, $ 229,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,100 $ 6,000 $ 70,000 Ending $ 19,5ee $20,400 $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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

Answer 1

1	Mason Company
	Schedule of Cost of Goods Manufactured
	Direct materials:
	Beginning raw materials inventory	8100
	Add: Purchases of raw materials	134000
	Total raw materials available	142100
	Less: Ending raw materials inventory	10500
	Raw materials used in production		131600
	Direct labor cost		85000
	Manufacturing overheads applied		207000
	Total manufacturing costs		423600
	Add: Beginning work in process inventory		6000
			429600
	Less: Ending work in process inventory		20400
	Cost of goods manufactured $		409200
2	Mason Company
	Schedule of Cost of Goods Sold
	Cost of goods manufactured $	409200
	Add: Beginning finished goods inventory	70000
	Cost of goods available for sale	479200
	Less: Ending finished goods inventory	25800
	Unadjusted Cost of goods sold $	453400
	Add: Underapplied overheads ($229000 - $207000)	22000
	Cost of goods sold $	475400
3	Mason Company
	Income Statement
	Sales		654000
	Cost of goods sold		475400
	Gross profit		178600
	Selling and administrative expenses:
	Selling expenses	103000
	Administrative expenses	40000	143000
	Net income $		35600