Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses | $ | 213,000 |
Purchases of raw materials | $ | 269,000 |
Direct labor | ? | |
Administrative expenses | $ | 155,000 |
Manufacturing overhead applied to work in process | $ | 373,000 |
Actual manufacturing overhead cost | $ | 356,000 |
Inventory balances at the beginning and end of the year were as follows:
Beginning of Year | End of Year | |||||
Raw materials | $ | 51,000 | $ | 37,000 | ||
Work in process | ? | $ | 26,000 | |||
Finished goods | $ | 37,000 | ? | |||
The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $660,000; 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.)
Direct Labor = Manufacturing Costs - Manufacturing overhead
applied - Raw materials used
Direct Labor = $685,000 - $373,000 - $283,000
Direct Labor = $29,000
Cost of Goods Manufactured = Cost of Goods available for sale -
Beginning Finished goods inventory
Cost of Goods Manufactured = $745,000 - $37,000
Cost of Goods Manufactured = $708,000
Cost of Goods Manufactured = Beginning Work in process +
Manufacturing costs - Ending work in process
$708,000 = Beginning Work in process + $685,000 - $26,000
Beginning Work in process = $49,000
Unadjusted cost of goods sold = Cost of goods available for sale
- Ending finished goods inventory
$660,000 = $745,000 - Ending finished goods inventory
Ending finished goods inventory = $85,000
Overapplied Overhead = Manufacturing overhead applied - Actual
manufacturing overhead
Overapplied Overhead = $373,000 - $356,000
Overapplied Overhead = $17,000
Net Operating Income = Gross Margin - Selling Expenses -
Administrative Expenses
$35,000 = Gross Margin - $213,000 - $155,000
Gross Margin = $403,000
Sales = Gross Margin + Cost of Goods Sold
Sales = $403,000 + $643,000
Sales = $1,046,000
Superior Company provided the following data for the year ended December 31 (all raw materials are...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 213,000 Purchases of raw materials $ 263,000 Direct labor ? Administrative expenses $ 151,000 Manufacturing overhead applied to work in process $ 372,000 Actual manufacturing overhead cost $ 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 $ 37,000 Work...
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 $ 266,000 $156,000 $ 364,000 $ 351,000 Inventory balances at the beginning and end of the year were as follows Beginning of Year End of Year Raw materials Work in process Finished goods $ 58,000...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 213,000 Purchases of raw materials $ 263,000 Direct labor ? Administrative expenses $ 152,000 Manufacturing overhead applied to work in process $ 374,000 Actual manufacturing overhead cost $ 356,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 50,000 $ 36,000 Work...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 213,000 Purchases of raw materials $ 269,000 Direct labor ? Administrative expenses $ 152,000 Manufacturing overhead applied to work in process $ 373,000 Actual manufacturing overhead cost $ 355,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 60,000 $ 32,000 Work...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 217,000 Purchases of raw materials $ 261,000 Direct labor ? Administrative expenses $ 150,000 Manufacturing overhead applied to work in process $ 373,000 Actual manufacturing overhead cost $ 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 $ 31,000 Work...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 214,000 Purchases of raw materials $ 263,000 Direct labor ? Administrative expenses $ 151,000 Manufacturing overhead applied to work in process $ 377,000 Actual manufacturing overhead cost $ 360,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 57,000 $ 37,000 Work...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 217,000 Purchases of raw materials $ 269,000 Direct labor ? Administrative expenses $ 154,000 Manufacturing overhead applied to work in process $ 366,000 Actual manufacturing overhead cost $ 354,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 57,000 $ 40,000 Work...
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 $ 215,000 $ 269,000 ? $ 156,000 $ 371,000 $ 354,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year $ 54,000 Raw materials Work in process Pinished goods End...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 218,000 Purchases of raw materials $ 267,000 Direct labor ? Administrative expenses $ 155,000 Manufacturing overhead applied to work in process $ 367,000 Actual manufacturing overhead cost $ 350,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 50,000 $ 35,000 Work...
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ 212,000 $ 267,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 155,000 $366,000 $ 355,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year End of Year $ 55,000...