Question

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 $ 660,000 $ 86,080 $ 138,000 $ 110,000 $ 43,080 $ 284,000 $223,880 Inventories Raw materials Work in process Finished goods Beginning $ 8,900 $ 5,600 $72,000 Ending $ 10,400 $ 20,600 $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.

Answer 1

Solution 1:

600 vou Awn 10 11 12 Mason Company Schedule of cost of goods manufactured Direct Material: Raw Material, Beginning $8,900.00 Add: Purchase of Raw Material $138,000.00 Total Raw material available $146,900.00 Less: Raw Material, Ending $10,400.00 Raw material used in production $136,500.00 Direct Labor cost $86,000.00 Applied Manufacturing Overhead $204,000.00 Total Manufacturing Costs $426,500.00 Add: Work in Process, Beginning $5,600.00 Subtotal $432,100.00 Less: Work in Process, Ending $20,600.00 Cost of goods manufactured $411,500.00 13 14 15 16 17 18 23 24 25 26 27 28 29 30 31 32 33 34 Sheet161 Sheet162 Sheet168 Sheet163 She

Solution 2:

600 vou Awn Mason Company Schedule of cost of goods manufactured Cost of goods manufactured Add: Finished Goods, Beginning Total Goods available for sale Less: Finished Goods, Ending Unadjusted Cost of goods Sold Add: Under-applied Overhead ($223000-$204000) Adjusted Cost of goods sold $411,500.00 $72,000.00 $483,500.00 $25,800.00 $457,700.00 $19,000.00 $476,700.00 10 11 12 13 14 15 16 17 18 19 23 24 25 26 27 28 29 30 31 32 33 34 Sheet161 Sheet162 Sheet168 Sheet163 She

Solution 3:

AK AR Mason Company Income Statement Sales Less: Cost of goods sold Gross Profit Less: Expenses: Selling Expenses Administrative expenses Net Income $660,000.00 $476,700.00 $183,300.00 11 $110,000.00 $43,000.00 $30,300.00 12 | 14 15 16 17 21 22 23 24 25 26 29 30 31 32 33 34 35 Sheet161 Sheet162 Sheet168 ) Sheet163 She