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 costs $ 652,000 $ 88,000 $ 134,000 $ 108,000 $ 44,000 $ 220,000 $ 209,000 Inventories Row materials Work in process Finished goods Beginning $ 8,700 $ 5,200 $ 79,000 Ending $ 10,600 $ 20,600 $ 25,300 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. Mason Company Schedule of Cost of Goods Manufactured Direct materials Total raw materials available Direct materials used in production < Prex 10 of 12 !!! Next >

Answer 1

1.

Mason Company
Schedule of Cost of Goods Manufactured
Work in process inventory, Beginning			5,200
Direct materials:
Raw materials inventory beginning	8,700
Add: Raw materials purchases	134,000
Total raw materials available	142,700
Less: Raw materials inventory ending	-10,600
Raw material used in production		132,100
Direct labor		88,000
Manufacturing Overheads		220,000
Total Manufacturing Costs			440,100
Total cost of work in process			445,300
Less:Work in process inventory ending			-20,600
Cost of goods manufactured			$424,700

2.

Actual manufacturing overhead costs = $209,000

Manufacturing overhead costs applied = $220,000

Over applied manufacturing overhead costs = Manufacturing overhead costs applied - Actual manufacturing overhead costs

= 220,000-209,000

= $11,000

Mason Company
Schedule of Cost of Goods Sold
Finished goods inventory, beginning	79,000
Cost of goods manufactured	424,700
Cost of goods available for sale	503,700
Finished goods inventory, Ending	-25,300
Unadjusted Cost of goods sold	478,400
Over applied manufacturing overhead	-11,000
Adjusted Cost of goods sold	$467,400

3.

Mason Company
Income Statement
Sales		652,000
Less: Cost of goods sold		-467,400
Gross profit		184,600
Selling and administrative expenses:
Selling expenses	108,000
Administrative expenses	44,000
Total selling and administrative expenses		-152,000
Net income		$32,600

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