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 $ 83,000 $ 137,000 $ 104,000 $ 48,000 $ 210,000 $ 226,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,600 $ 5,900 $ 70,000 Ending $ 11,000 $ 20,700 $ 25,100 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

Answer 1

8600 137000 145600 11000 MASON COMPANY Schedule of Cost of goods Manufactured Direct Materials: Beginning Raw material Raw material purchased Total raw materials available for use Less: Ending Raw material Raw Materials used in production Direct labor Manufacturing over head applied to work in process Total manufacturing costs Add: Beginning Work in process Total cost of work in process Less:Ending Work in process Cost of goods Manufactured 134600 83000) 210000 427600 59000 433500 20700 412800

MASON COMPANY Schedule of Cost of goods sold Beginning finished goods Add: Cost of goods manufactured Cost of goods available for sale Less Ending finished goods Cost of goods sold Add: Underapplied MOH/ Less: Overapplied MOH Adjusted Cost of goods sold 70000 412800 482800 25100 457700 16000 473700 MASON COMPANY Income Statement Sales Less: Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Net Income 656000 473700 182300 104000 48000 152000 30300