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 $524,000 $ 70,000 $ 118,000 $ 140,000 $ 63,000 $ 90,000 $ 80,000 Inventories Raw materials Work in process Finished goods Beginning $ 7,000 $ $ 10,000 $ $ 20,000 $ Ending 15,000 5,000 35,000 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 Prenare a schedule of cost of goods manufactured. Assume all raw materials used in nraduction were direct materials

Answer 1

1) prepare schedule of cost of goods manufactured

Particular	amount($)
Beginning Raw material inventory	7000
+Purchases of Raw material	118000
Total Raw material available	125000
(-) ending Raw material inventory	(15000)
Raw material used in production	110000
Direct labour	70000
Manufacturing OVERHEAD appiled to work in process	90000
Total Manufacturing cost	270000
+ Beginning work in process	10000
(-) ending work in process	(5000)
cost of goods manufactured	275000

2) prepare schedule of cost of goods sold

Particular	amount ($)
Beginning finished goods	20000
+Cost of goods manufactured	275000
Cost of goods available for sale	295000
(-) ending finished goods	(35000)
Unadjusted cost of goods sold	260000
(-) overapplied overhead (note below)	(10000)
Cost of goods sold	250000

note = Manufacturing OVERHEAD OVERAPPLIED/underapplied= OVERHEAD appiled- overhead incurred

=90000 - 80000= 10000

3). INCOME STATEMENT

Particular	amount ($)
Sales	524000
(-) cost of goods sold	(250000)
Gross margin	274000
(-) selling and administrative expenses
Selling expenses	(140000)
Administrative expenses	(63000)
NET OPERATING INCOME	71000

  

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