Sales Direct labor cost Raw material purchases Selling expenses Administrative e

Question

Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs S 655, 000 $ 87,000 $ 133, 000 s 106,000 $ 49,000 s 200,000 s 229,000 Inventories Raw materials Work in process Finished goods Beginning Ending S 8,800 10,500 $ 5, 300 20,700 S 74,000 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.

Explanation / Answer

Schedule of cost of goods manufactured

Cost of goods sold schedule :

Income statement :

Direct materials Beginning raw material 8800 Raw material purchase 133000 Raw material available for use 141800 Less: Ending raw material -10500 Direct material used 131300 Direct labour 87000 Manufacturing overhead applied 200000 Total manufacturing cost 418300 Beginning work in process 5300 Total cost of work in process 423600 Less: Ending work in process -20700 Cost of goods manufactured 402900

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