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): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 214,000 $ 266,000 $ 158,e00 $ 366,000 $ 354,000 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 60,000 $30,000 $30,000 $ 34,000 The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $667,000; and the net operating income was $33,000. 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.) Complete this question by entering your answers in the tabs below

Explanation / Answer

Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning 60000 Add: Purchases of raw materials 266000 Total raw materials available 326000 Deduct: Raw materials inventory, ending 30000 Raw materials used in production 296000 Direct labor 28000 Manufacturing overhead applied to work in process inventory 366000 Total manufacturing costs 690000 Add: Beginning work in process inventory 36000 726000 Deduct: Ending work in process inventory 30000 Cost of goods manufactured 696000 Schedule of Cost of Goods Sold Finished goods inventory, beginning 34000 Add: Cost of goods manufactured 696000 Cost of goods available for sale 730000 Deduct: Finished goods inventory, ending 63000 Unadjusted cost of goods sold 667000 Less: Overapplied overhead 12000 Adjusted cost of goods sold 655000 Income Statement Sales 1060000 Cost of goods sold 655000 Gross margin . 405000 Selling and administrative expenses: Selling expenses 214000 Administrative expense 158000 372000 Net operating income 33000

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