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 $ 660,000 $ 84,000 $ 132,000 $ 109,000 $ 44,000 $ 203,000 $ 226,000 Inventories Raw materiala Work in process Finished goods Beginning $ 8,200 $ 5,000 $ 72,000 Ending $ 10,900 $20,700 $25,300 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 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials Mason Company Schedule of Cost of Goods Manufactured Direct materials:

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Part 1) Mason Company Cost of goods manufactured Direct Material Beginning inventory Purchases Total raw material available for use Less ending inventory Raw Material Used in production Direct Labour Manufacturing overheads Total manufacturing cost Beginning work in process 8200 1320001 140200 109001 1293001 840001 203000 416300 5000 421300 20700 4006001 Less ending work in process Cost of goods manufactured

Part 2) Mason Company Statement of cost of goods sold Beginning finished Goods Cost of goods manufactured Total goods available for sale Less Ending inventory (740000-78000) Unadjusted cost of goods sold Add underapplied overheads (226000-203000) Adjusted Cost of goods sold 72000 400600 472600 25300 447300 23000 470300

Answer Part 3) Suprerior Company Income Statement For the year ended December 31 Sales Cost of goods sold (662000-(375000-359000) Gross Margin (368000+39000) Selling and adminstrative expenses Selling expenses Adminstrative expense 660000 470300 1897001 109000 44000 153000 36700 Net Income