Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): points $ $ 216,000 264,000 (8 02:34:27 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ $ $ 151,000 373,000 357,000 Skipped Inventory balances at the beginning and end of the year were as follows: eBook Raw materials Work in process Finished goods Beginning of Year End of Year $ 58,000 $ 39,000 ? $ 26,000 $ 32,000 Print The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $667,000; 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.

Answer 1

Income Statement
Sales		1050000
Cost of goods sold		651000
Gross margin .		399000
Selling and administrative expenses:
Selling expenses	216000
Administrative expense	151000	367000
Net operating income		32000
Schedule of Cost of Goods Sold
Finished goods inventory, beginning		32000
Add: Cost of goods manufactured		703000
Cost of goods available for sale		735000
Deduct: Finished goods inventory, ending		68000
Unadjusted cost of goods sold		667000
Less: Overapplied overhead		16000
Adjusted cost of goods sold		651000
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	58000
Add: Purchases of raw materials	264000
Total raw materials available	322000
Deduct: Raw materials inventory, ending	39000
Raw materials used in production		283000
Direct labor		29000
Manufacturing overhead applied to work in process inventory		373000
Total manufacturing costs		685000
Add: Beginning work in process inventory		44000
		729000
Deduct: Ending work in process inventory		26000
Cost of goods manufactured		703000