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 Purchases of raw materials Direct labor 219,000 261,000 Manufacturing overhead applied to work in process Actual manufacturing over s 155,000 $367,000 $355,000 Inventory balances at the beginning and end of the year were as follows: of rear End of Year $ 57,000 37,000 25,000 Work in process Pinished goods $ 38,000 The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $745,000: the unadjusted cost of goods sold totaled $665,000; and the net operating income was $32,000. 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 Prepare an income statement for the year. State

Answer 1

Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	57000
Add: Purchases of raw materials	261000
Total raw materials available	318000
Deduct: Raw materials inventory, ending	37000
Raw materials used in production		281000
Direct labor		32000	Balancing Figure =Total Manufacturing Cost-Manufacturing OH applied to inventory-Raw material used in
Manufacturing overhead applied to work in process inventory		367000			production
Total manufacturing costs		680000
Add: Beginning work in process inventory		52000		Balancing Figure
		732000		Cost of Goods Manufactured+Ending W.I.P -Total Manufacturing Cost
Deduct: Ending work in process inventory		25000
Cost of goods manufactured		707000
	Schedule of Cost of Goods Sold
Finished goods inventory, beginning		38000
Add: Cost of goods manufactured		707000		Balancing Figure
Cost of goods available for sale		745000
Deduct: Finished goods inventory, ending		80000		Balancing Figure
Un adjusted cost of goods sold		665000
Less: Over applied overhead		12000
Adjusted cost of goods sold		653000
	Income Statement
Sales		1059000
Cost of goods sold		653000
Gross margin .		406000
Selling and administrative expenses:				Sales = Gross margin+Cost of goods sold = 406000+653000=1059000 Gross margin = Net operating income+Selling and Administrative expense = 374000+32000 = 406000 Cost of goods sold = Un adjusted cost of goods sold-Over applied overhead = 665000-12000 = 653000 Over applied overhead = 367000-355000 = $12000
Selling expenses	219000
Administrative expense	155000	374000
Net operating income		32000