Question

Check my work 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 costs $ 653,000 $ 87,000 $ 135,000 $ 104,000 $ 42,000 $ 224,000 $ 206,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,500 $ 5,600 $ 77,000 Ending $ 10,000 $ 20,300 $ 25,500 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 Prey. 4 of 4 Next

Answer 1

1 Mason Company Schedule of Cost of Goods Manufactured Direct Material Beginning raw material inventory $ 8,500 Add: Purchase of raw materials $ 135,000 Total Raw Materials Available $ 143,500 Deduct: Ending Raw Materials Inventory $ 10,000 Raw Materials used Direct Labor Cost Manufacturing Overhead applied to work in progress Total manufacturing costs Add: beginning Work in Process inventory Sub Total Deduct: Ending Work in Process inventory Cost of Goods Manufactured $ 133,500 $ 87,000 $ 224,000 $ 444,500 $ 5,600 $ 450,100 $ 20,300 $ 429,800 2 2 $ $ Mason Company Schedule of Cost of Goods sold Beginning Finished Goods inventory Add: Cost of Goods Manufactured Costs of goods available for sale Deduct: Ending Finished goods inventory Unadjusted Cost of Goods sold Deduct: Overapplied manufacturing overhead Adjusted Cost of Goods sold $ $ 77,000 429,800 506,800 25,500 481,300 18,000 463,300 $ $ $

3 $ $ 653,000 463,300 189,700 $ Mason Company Income statement Sales Less: cost of Goods sold Gross Margin Selling and administrative Expenses: Selling Expenses Administrative Expenses Total Selling and Administrative Expenses Net Income $ 104,000 $ 42,000 $ $ 146,000 43,700 Working Notes: Overapplied manufacturing Overhead = $224,000-$206,000 = $18,000