The following data from the just completed year are taken from the accounting re

Question

The following data from the just completed year are taken from the accounting records of Mason Company: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs 654,000 $ 87,000 $ 139,000 $ 107,000 $ 50,000 203,000 226,000 Inventories Raw materials Work in process Finished goods Beginning Ending $ 8,200 10,300 $ 5,900 20,200 $77,000 25,900 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

Add: Underapplied Mfg. Overhead

(226,000 - 203,000)

Schedule Cost of Goods Manufactured Opening Raw Material                8,200 Add: Raw material Purchased           139,000 Less: Closing Raw Material           (10,300) Direct Material Used    136,900 Direct Labor      87,000 Manufacturing Overhead applied    203,000 Total Current Manufacturing Cost    426,900 Add: Opening WIP         5,900 Less: Closing WIP    (20,200) Cost of Goods Manufactured    412,600

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