Question

The following data from the just completed year are taken from the accounting records of Mason Company: Direct Labor cost Ra material purchases Selling expenses ministrative expenses Manufacturing overhead applied to work in process Retual manufacturing overhead costs $ 551,000 $ 87.000 $ 137,000 $ 107.000 $ 47,000 $ 210,000 $ 228,000 Inventories Rawaterials Work in process Finished goods Beginning $ 3,300 $ 5,200 $ 75,000 Ending $ 10,900 $ 20.500 $25,200

Answer 1

Mason Company Schedule of Cost of Goods Manufactured $ $ $ $ 8,300 137,000 145,300 (10,900) Direct Material Beginning Raw material inventory Add: Raw material purchases Total Raw material available Less : Ending Raw material inventory Raw Materials used in the production Direct Labour Manufacturing overhead applied to work in process Total Manufacturing Costs Add : Beginning Work in Process $ $ $ $ $ $ $ $ 134,400 87,000 210,000 431,400 5,200 436,600 (20,500) 416,100 Less : Ending Work in Process Cost of Goods Manufactured

Mason Company Schedule of Cost of Goods Sold Beginning Finished Goods Inventory Add: Cost of Goods Manufactured Cost of Goods available for sale Less : Ending Finished Goods Inventory Unadjusted Cost of Goods Sold Add : Underapplied manufacturing overhead Adjusted Cost of Goods Sold $ $ $ $ $ $ $ 75,000 416,100 491,100 (25,200) 465,900 18,000 483,900 Working Notes: Calculation of Under applied Overhead Actual Manufacturing Overhead Less: Manufacturing overhead applied Under applied overhead $ $ $ 228,000 (210,000) 18,000

Mason Company Income Statement Sales Less: Cost of Goods sold Gross Margin Less: Selling and Administrative expenses Selling expenses Administraive expenses Net Income $ $ $ 651,000 (483,900) 167,100 $ $ (107,000) (47,000) $ $ (154,000) 13,100