Question

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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 $ 654,000 $ 84,000 $ 136,000 $ 107,000 $ 49,000 $ 207,000 $ 222,000 Inventories Raw materials Work in process Finished goods Beginning of Year $ 8,200 $ 5,900 $ 74,000 End of Year $ 10,300 $ 20,500 $ 25,500 Required: 1. 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: Raw materials available for use Raw materials used in production Total manufacturing costs Cost of goods manufactured $ 0

Answer 1

Solution

Mason company
Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning	$          8,200.00
Raw material Purchased	$    1,36,000.00
Raw material available for use	$    1,44,200.00
Less: Raw material Inventory Ending	$        10,300.00
Direct Material Used		$     1,33,900.00
Direct labor		$         84,000.00
Manufacturing overheads applied		$     2,07,000.00
Total manufacturing Cost During the month		$     4,24,900.00
Add: Work in process Beginning		$           5,900.00
Total Work in Process		$     4,30,800.00
Less: Work in progress Ending		$         20,500.00
Cost of Goods Manufactured		$     4,10,300.00

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Mason company
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$         74,000.00
Add: Cost of goods manufactured		$     4,10,300.00
Goods Available for sale		$     4,84,300.00
Less :Ending Finished goods Inventory		$         25,500.00
Unadjusted Cost of Goods Sold		$     4,58,800.00
Underapplied Manufacturing overheads		$         15,000.00
Adjusted cost of goods sold		$     4,73,800.00

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Mason company
Income statement
Sales revenue		$     6,54,000.00
Less: Cost of goods sold		$     4,73,800.00
Gross profit		$     1,80,200.00
Selling and administrative expenses
Selling expenses	$    1,07,000.00
Administrative expenses'	$        49,000.00	$     1,56,000.00
Net income		$         24,200.00