Superior Company provided the following data for the year ended December 31 (all

Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials) $ 217,000 $ 262,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 160,000 $ 365,000 $ 353,000 Inventory balances at the beginning and end of the year were as follows Beginning of Year End of Year Raw materials Work in process Finished goods $. 58,000 32,000 ?$24,000 $ 37,000 The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $39,000. The company's underapplied or overapplied overhead is closed 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.)

Explanation / Answer

Ending Finished Goods: Cost of Goods available for sale 745000 Less: Cost of Goods sold 661000 Ending Finished Goods: 84000 Beginning WIP Total cost of Goods available for sale 745000 Less: Beginning FG 37000 Cost of Goods manufactured 708000 Add: Ending WIIP 24000 Less: Current cost of manufacturing 685000 Beginning WIP 47000 Labour c ost incurred: Total Manufacturing cost 685000 Less: material consumes 288000 Less: Ohh applied 365000 Labour cost 32000 Schedule of cost of Goods manufactured: Beginning WIP 47000 Raw material cost Beginning Material 58000 Add: Purchases 262000 Total material available 320000 Less: Ending inventory 32000 Material consumed 288000 Direct labour 32000 OH applied 365000 Total manufacturing cost 685000 Total cost of goods manufacturing 732000 Less: Ending inventory of WIP 24000 Cost of Good manufactured 708000 Schedule Showing cost of Goods sold: Beginning FG 37000 Add: Cost of goods manufactured 708000 Cost of goods available for sale 745000 Less: Ending inventory of FG 84000 Unadjusted cost of goods sold 661000 Less: Overheads overapplied -12000 Adjusted Cost of Goods sold 649000 Income Statement: Sales: 848000 Less: Unadjusted cost of goods sold 649000 Gross margin 199000 Less: Admin expense 160000 Net operating income 39000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.