Superior Manufacturing Company has the following cost and expense data for last
ID: 2377625 • Letter: S
Question
Superior Manufacturing Company has the following cost and expense data for last year, which ended December 31st.
Beginning Raw Materials $ 30,000
Ending Raw Materials 20,000
Raw Materials Purchases 205,000
Indirect Materials 15,000
Beginning Work-in-Progress 80,000
Ending Work-in-Progress 50,000
Beginning Finished Goods 110,000
Ending Finished Goods 120,000
Direct Labor 350,000
Factory Insurance 14,000
Property Taxes on Factory 6,000
Sales Revenue 1,500,000
Delivery Expense 100,000
Sales Office Salaries 150,000
Indirect Labor 90,000
Depreciation on Factory Equipment 40,000
Utilities for Factory 65,000
Depreciation on Factory Building 24,000
Administrative Salaries 335,000
In good order and form, complete the following requirements.
1. Prepare a Cost of Goods Manufactured Schedule for Superior.
2. Prepare a Cost of Goods Sold Schedule for Superior
3. Prepare an Income Statement for Superior
Explanation / Answer
(a) Superior Manufacturing Company
Cost of Goods Manufactured Schedule
For the year Ended December 31, 2005
Work in process, 1/1
Direct materials $ 80,000
Raw materials inventory, 1/1 $ 30,000
Raw materials purchased 205,000
Total raw materials available for use 235,000
Less: Raw materials inventory, 12/31 20,000
Direct materials used $ 215,000
Direct labor 350,000
Manufacturing overhead
Indirect labor 90,000
Factory utilities 65,000
Factory machinery rent 40,000
Factory manager's salary 35,000
Depreciation on building 24,000
Indirect materials 15,000
Factory insurance 14,000
Property taxes 6,000 289,000
Total manufacturing overhead 854,000
Total current manufacturing costs 934,000
Total cost of work in process 50,000
Less: Work in process, 12/31 $ 884,000
Cost of goods manufactured
(b) Superior Manufacturing Company
Income Statement
For the year Ended December 31, 2005
Sales (net) $ 1,500,000
Cost of goods sold
Finished goods inventory, January 1 $ 110,000
Cost of goods manufactured 884,000
Cost of goods available for sale 994,000
Less: Finished goods inventory, December 31 120,000
Cost of goods sold 874,000
Gross profit 626,000
Operating expenses
Administrative expenses 300,000
Sales commissions 150,000
Delivery expenses 100,000
Total operating expenses 550,000
Net income $ 76,000
Current assets
Cash $ 17,000
Short-term investments 26,000
Accounts receivable (net) 120,000
Inventories
Finished goods $ 120,000
Work in process 50,000
Raw materials 20,000 190,000
Prepaid expenses 13,000
Total current assets $ 366,000
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