Question

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3) 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 $ 213,000 $ 267,000 ? $ 154,000 $367,000 $ 356,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 54,000 $ 36,000 Work in process 7 $ 32,000 Finished goods $ 35,000 ? The total manufacturing costs for the year were $670,000, the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $32,000. 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

Requirement Cost of Goods Manufactured Raw Materials, Beginning $ Add : Purchases of Raw Materials $ Total Raw Materials Available $ Less : Raw Materials, Ending $ Raw Materials used in Production $ 54,000 267,000 321,000 (36,000 285,000 Total Manufacturing Costs Less : Direct Materials Less : Manufacturing Overheads applied Direct Labor $ $ $ $ 670,000 (285,000) (367,000) 18,000 Cost of Goods available for Sale Less : Finished Goods, Beginning Cost of Goods Manufactured $ $ $ 730,000 (36,000) 694,000 Cost of Goods Manufactured Add : Work in Process, Ending $ $ $ $ $ 694,000 32,000 726,000 (670,000) 56,000 Less : Total Manufacturing Costs Work in Process, Beginning

$ $ Superior Company Schedule of Cost of Goods Manufactured Particulars $ Direct Materials : Raw Materials, Beginning $ 54,000 Add : Purchases of Raw Materials $ 267,000 Total Raw Materials Available $ 321,000 Less : Raw Materials, Ending $ (36,000) Raw Materials used in Production Direct Labor $ Less : Manufacturing Overheads applied $ Total Manufacturing Costs $ Add : Work in Process, Beginning $ $ Less : Work in Process, Ending $ Cost of Goods Manufactured $ A A 285,000 18,000 367,000 670,000 56,000 726,000 (32,000) 694,000 Requirement | Cost of Goods Sold Superior Company Schedule of Cost of Goods Sold Particulars Finished Goods, Beginning $ Add : Cost of Goods Manufactured $ Cost of Goods available for Sale $ Less : Finished Goods, Ending $ Unadjusted Cost of Goods Sold $ Less : Overapplied Overheads $ Adjusted Cost of Goods Sold $ - W| 0 0 0 0 | 0 $ 36,000 694,000 730,000 (67,000 663,000 (11,000) 652,000

Requirement | Income Statement Superior Company Income Statement Particulars Sales Less : Cost of Goods Sold Gross Margin $ $ $ $ $ $ 1,051,000 652,000 399,000 Less : Selling and Administrative Expenses - Selling Expenses - Administrative Expenses Total Selling and Administrative Expenses $ $ 213,000 154,000 $ 367,000 Net Operating Income $ 32,000