Question

Complete this question by entering your answers in the tabs Income Statement COGS Schedule COGM Schedule

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 140,000 Purchases of raw materials $ 290,000 Direct labor ? Administrative expenses $ 100,000 Manufacturing overhead applied to work in process $ 285,000 Actual manufacturing overhead cost $ 270,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 40,000 $ 10,000 Work in process ? $ 35,000 Finished goods $ 50,000 ? The total manufacturing costs for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. 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.)

Answer 1

Income Statement
Sales		915000
Cost of goods sold		645000
Gross margin .		270000
Selling and administrative expenses:
Selling expenses	140000
Administrative expense	100000	240000
Net operating income		30000
Schedule of Cost of Goods Sold
Finished goods inventory, beginning		50000
Add: Cost of goods manufactured		690000
Cost of goods available for sale		740000
Deduct: Finished goods inventory, ending		80000
Unadjusted cost of goods sold		660000
Less: Overapplied overhead		15000
Adjusted cost of goods sold		645000
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	40000
Add: Purchases of raw materials	290000
Total raw materials available	330000
Deduct: Raw materials inventory, ending	10000
Raw materials used in production		320000
Direct labor		78000
Manufacturing overhead applied to work in process inventory		285000
Total manufacturing costs		683000
Add: Beginning work in process inventory		42000
		725000
Deduct: Ending work in process inventory		35000
Cost of goods manufactured		690000