Question

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 $656,000 $ 89,000 $140,000 $103,890 $ 41,000 $202,000 $228,000 Inventories Raw materials Work in process Finished goods Beginning Ending $ 8,900 $10,800 $ 5,300 $20,700 $74,000 $25,180 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

Answers Schedule of Cost of Goods Manuacturing Direct Material Raw Mateiral Invenotry, Beginning 8900 ADD: Purchase of Raw Material 140000 Total raw Material Available 148900 LESS: Raw Mateiral Invenotry, Ending 10800 Raw material Used in Prodcution Direct Labor Manufacturing overheads Applied Total Manufacturing cost ADD Beginning Work in Process 138100 89000 2020001 4291001 5300 434400 207001 413700 LESS: Ending Work in Process Cost of Goods Manufactured Cost of Goods Sold Finished Good Invenotry, Beginning ADD: Cost of Goods Manufactured Cost of Goods Available for Sale LESS: Finidhed goods Inventory, Ending Unadjusted Cost of Goods Sold ADD: Underapplied Overhead Adjusted cost of Goods Sold 74000 413700 487700 25100 462600 26000 488600

656000 488600 167400 Income Statement Sales Cost of Goods Sold Gross Margin Selling and Administrstive Expenes Selling Expenses 103000 Administrative Expenses 41000 Net Oprating Income 144000 23400