Valenko Company provided the following account balances for the year ended Decem

Question

Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $39,000. The company

Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):

Explanation / Answer

The schedules of cost of goods manufactured. Direct Material Raw Material Invenory:Beginning $    51,000 Add: Purchases of Raw Material $ 264,000 Raw Material Available $ 315,000 Deduct: Raw Material Invenory: Ending $    38,000 Raw Material Used in production $     277,000 Direct Labor $        66,000 Manufacturing Overhead applied to Work in process $     332,000 Total Manufacturing Cost $     675,000 Add:Beginning Work in process Inventory $        48,000 $     723,000 Deduct: Ending Work in process Inventory $        32,000 Cost of Good Manufactured $     691,000 The schedules of cost of goods sold Finished Goods Inventory Beginning $        34,000 Add: Cost of Good Manufactured $     691,000 Cost of Goods Available for sale $     725,000 Deduct: Finished Goods Inventory Ending $        62,000 Unadjusted Cost of Good Sold $     663,000 Add: Underapplied Overhead $        24,000 Adjusted Cost of Good Sold $     687,000 The Income Statement Sales $ 1,091,000 Cost of Good sold $     687,000 Gross Margin $     404,000 Selling and Administrative Expenses Selling expenses $ 213,000 Administrative expenses $ 152,000 $     365,000 Net Income $        39,000

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