Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement
Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses | $215,000 |
Purchases of raw materials | $260,000 |
Direct labor | ? |
Administrative expenses | $160,000 |
Manufacturing overhead applied to work in process | $340,000 |
Total actual manufacturing overhead costs | $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 | $40,000 |
Work in process | ? | $33,000 |
Finished goods | $30,000 | ? |
The total manufacturing costs for the year were $675,000: the cost of goods available for sale totaled $720,000: the unadjusted cost of goods sold totaled $665,000: and the net operating income was $35,000. The company's overapplied or underapplied overhead is closed entirely 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.)
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