Question

6 Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials: Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing over head cost $ 218,000 $ 268,000 . $ 155,000 $ 370,000 $ 356,000 Inventory balances et the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning $ 57,000 ? $ 39,000 Ending $ 34,000 $ 24,000 2 The total manufacturing costs ooed to production for the year were $680,000, the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $662.000, and the net operating income was $38,000. 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.

Answer 1

Schedule of Cost of Goods Manufactured
Direct Materials:
Raw Materials inventory,beginning					57,000
Add:purchases of raw materials					268,000
total raw materials available					325,000
Deduct:Raw materials inventory ,ending					34,000
Raw Materials used in production						291,000
Direct Labor						19,000
Manufacturing overhead Applied to WIP						370,000
total manufacturing costs						680,000
Add:Beginning work in process inventory						40,000
						720,000
Deduct:Ending work in process inventory						24,000
Cost of goods manufactured						696,000
Schedule of Cost of Goods sold
Finished goods inventory,beginning						39,000
Add:Cost of goods manuactured						696,000
Cost of goods available for sale						735,000
Deduct:Finished goods inventory,ending						73,000
Unadjusted cost of goods sold						662,000
less::overapplied overhead						14000
Adjusted cost of goods sold						648,000
Income statement
Sales						1,059,000
cost of good sold						648,000
Gross margin						411,000
Selling and administrative expense
Selling expenses					218,000
Administrative expense					155,000	373,000
Net operating income						38,000