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 coats $ 655,000 $ 89,000 $ 136,000 $ 106,000 $ 41,000 $ 210,000 $ 224,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,600 $ 5,700 $ 78,000 Ending $ 10,100 $ 20,700 $ 25, 100 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw 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 4 of 6 !!! Next >

Answer 1

1)
Mason Company Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, Beginning	$ 8,600
Add: Raw material Purchases	$ 136,000
Total raw materials available	$ 144,600
Less : Raw materials inventory, Ending	($ 10,100)
Raw materials used in production		$ 134,500
Direct labor Cost		$ 89,000
Manufacturing overhead applied to work in process inventory		$ 210,000
Total Manufacturing costs		$ 433,500
Add: Beginning work in process inventory		$ 5,700
		$ 439,200
Less : Ending work in process inventory		($ 20,700)
Cost of Goods manufactured		$ 418,500
2)
Mason Company Schedule of Cost of Goods Sold
Finished goods inventory, Beginning	$ 78,000
Add: Cost of goods manufactured	$ 418,500
Cost of goods available for sale	$ 496,500
Less : Finished goods inventory, Ending	($ 25,100)
Unadjusted cost of goods sold	$ 471,400
Add: Underapplied overhead             ( $ 224,000 (-) $ 210,000 )	$ 14,000
Adjusted cost of goods sold	$ 485,400
3)
Mason Company Income Statement
Sales		$ 655,000
Cost of goods sold		($ 485,400)
Gross margin		$ 169,600
Less: Selling and administrative expenses:
- Selling expenses	$ 106,000
- Administrative expense	$ 41,000	($ 147,000)
Net operating income (or) Net Income		$ 22,600