Question

The following data from the just completed year are taken from the accounting records of Mason Company 12.5 points Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs Skipped $ 657.ee $ 85, eee $ 132,000 $ 100. eee $ 41, see $ 201,600 $ 222.ee Print Inventories Raw materials Work in process Finished goods Beginning $ 8. see $ 5,200 $ 76,099 Ending $ 10.100 $ 20.zee $ 25,900 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

Answer

Schedule of Goods Manufactured
Direct Material
Opening Raw Material	8,500
Add: Raw material purchased	132,000
Total raw materials available	140,500
Less: Closing Raw Material	(10,100)
Raw Materials used in Production		130,400
Direct Labor		85,000
Manufacturing Overhead applied to Work in process		201,000
Total Manufacturing cost		416,400
Add: Opening WIP		5,200
		421,600
Less: Closing WIP		(20,700)
Cost of goods manufactured		400,900

Schedule of Cost of Goods Sold
Opening Finished Goods	76,000
Add: Cost of Goods manufactured	400,900
Cost of Goods available for Sale	476,900
Less: Closing Finished Goods	(25,900)
Unadjusted Cost of Goods Sold	451,000
Add: Underaapplied Overhead	21,000
Adjusted Cost of Goods Sold	472,000

Income Statement
Sales		657,000
Cost of Goods Sold		472,000
Gross Margin		185,000
Selling and Administrative expenses
Selling Expenses	100,000
Administrative Expenses	41,000	141,000
Net Operating Income		44,000

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