Supenior Company provided materials) the following data for the year ended Decem

Question

Supenior Company provided materials) the following data for the year ended December 31 (all raw materials are used in production as direct Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost 212,000 268,00e 3 154,e00 S 376,ee0 $ 359,ee0 inventory balances at the beginning and end of the year were as follows: Beglnning of S 53,000 $ 34,000 $ 38,000 End of Ye Raw materials work in process Finished goods 32,e00 Th e total manufacturing costs for the year were $685,000 the cost of goods available for sale totaled $735 usso0) and the net operaing inc was $38,000. The company's underapplied r overapplied oveead i ,000. the unadjusted cost erapplied or overapplied overhead is lclosed to Cost of Goods Sold

Explanation / Answer

NCOME STATEMENT : Sales (648000+404000) $10,52,000 Cost of goods sold (665000-376000+359000) $6,48,000 Gross margin (366000+38000) $4,04,000 Selling and administrative expenses Selling expenses $2,12,000 Administrative expenses $1,54,000 -$3,66,000 Net operating income $38,000 COST OF GOODS SOLD SCHDULE : Beginning finished goods inventory $38,000 Add: Cost of goods manufactured (735000-38000) $6,97,000 Cost of goods available for sale $7,35,000 Less: Ending finished goods inventory (735000-665000) -$70,000 Unadjusted cost of goods sold $6,65,000 Less: Over applied overhead (376000-359000) -$17,000 Adjusted cost of goods sold $6,48,000 COST OF GOODS MANUFACTURED SCHDULE : Beginning work in process ($729000-685000) $44,000 Raw material consumed Beginning raw material $53,000 Add: Purchase raw material $2,68,000 Less: Ending raw material -$34,000 $2,87,000 Direct labour (685000-287000-376000) $22,000 Manufacturing overhead $3,76,000 Total manufacturing cost $6,85,000 (697000+32000) $7,29,000 Less: Ending work in process -$32,000 Cost of goods manufactured $6,97,000

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