Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ 220,000 $ 265,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 160,000 $ 373,000 $ 354,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year End of Year $ 53,000 $ 32,000 ? $ 33,000 $ 37,000 The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $664,000; and the net operating income was $36,000. 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.) Complete this question by entering your answers in the tabs below. Income Statement COGS Schedule COGM Schedule

Answer 1

1) Income statement

Sales		1061000
Cost of goods sold (664000-19000)		645000
Gross profit		416000
Selling and administrative expense
Selling expense	220000
Administrative expense	160000
Total Selling and administrative expense		380000
Net income		36000

2) Schedule of cost of goods sold

Beginning finished goods	37000
Cost of goods manufactured	708000
Cost of goods available for sale	745000
Ending finished goods	81000
Unadjusted cost of goods sold	664000
Less: Over applied overhead	-19000
Adjusted cost of goods sold	645000

3) Schedule of cost of goods manufactured

Direct material used
Beginning raw material	53000
Raw material purchase	265000
Raw material available for use	318000
less: Ending raw material	32000
Direct material used		286000
Direct labor		21000
Manufacturing overhead applied		373000
Total manufacturing cost		680000
Beginning work in process		61000
Total cost of work in process		741000
Less: Ending work in process		33000
Cost of goods manufactured		708000