Question

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 overhead cost $ 214.000 $ 263,000 2 $ 157,000 $ 372,000 $ 355,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Tinished goods Beginning $ 53,000 ? $ 32,000 Ending $ 33,000 $ 27,000 2 The total manufacturing costs added to production for the year were $685,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $35,000. 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. < Prev 4 of 6 Next >

Answer 1

Income Statement
Sales Revenue		$ 1,055,000
Cost of Goods Sold		$     648,000
Gross Profit		$     407,000
Operating Expenses
Selling Expenses	$        214,000
Administrative Expenses	$        157,000
Total Operating Expenses		$     371,000
Net Income (Loss)		$       36,000

Schedule of Cost of Goods Sold
Finished Goods Inventory, Beginning		$       32,000
Add: Cost of Goods Manufactured		$     703,000
Cost of Goods Available for sale		$     735,000
Deduct : Finished Goods Inventory, Ending		$       70,000
Unadjusted Cost of goods sold		$     665,000
Overapplied Overhead		$      (17,000)
Adjusted Cost of goods sold		$     648,000

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$          53,000
Add: Purchases	$        263,000
Total Raw Material Available	$        316,000
Deduct : Raw Material in inventory, ending	$          33,000
Raw Material used in production		$     283,000
Direct Labor		$       30,000
Manufacturing Overhead Applied		$     372,000
Total Manufacturing Costs incurred in March		$     685,000
Add : Beginning Work in Process Inventory		$       45,000
Total Manufacturing Costs		$     730,000
Deduct: Ending Work in Process Inventory		$       27,000
Cost of Goods Manufactured		$     703,000

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