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 $ 657,000 $ 81,000 $ 138,000 $ 108,000 $ 49,000 $ 200,000 $ 223,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,100 $ 5,100 $ 76,000 Ending $ 10,100 $ 20,700 $25,300 . Required: 1. Prepare a schedule of cost of goods manufactured. Assume all law 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. < Prev 2 of 3 8 Next >

Answer 1

• Requirement 1

Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw material inventory	$8,100
Add: Purchase of raw material	$138,000
Total raw materials available	$146,100
Less: Ending raw material inventory	$10,100
Raw material used in production	$136,000
Less: Indirect materials	$0	$136,000
Direct labor cost		$81,000
Manufacturing Overhead applied		$200,000
Total manufacturing costs		$417,000
Add: Beginning WIP Inventory		$5,100
Total cost of Work in Process		$422,100
Less: Ending WIP Inventory		$20,700
Cost of Goods manufactured		$401,400

• Requirement 2

Schedule of Cost of Goods Sold
Beginning Finished Goods Inventory	$76,000
Add: Cost of Goods manufactured	$401,400
Cost of Goods available for sale	$477,400
Less: Ending finished goods inventory	$25,300
Unadjusted Cost of Goods Sold	$452,100
Add: Under applied Overheads	$23,000
Cost of Goods Sold [adjusted]	$475,100

• Requirement 3

Sales		$657,000
Cost of Goods Sold		$475,100
Gross Profits		$181,900
Operating Expenses:
Selling expense	$108,000
Administrative expense	$49,000
Total Operating Expense		$157,000
Net Income		$24,900