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

Selling expenses	$	211,000
Purchases of raw materials	$	266,000
Direct labor		?
Administrative expenses	$	159,000
Manufacturing overhead applied to work in process	$	336,000
Total actual manufacturing overhead costs	$	356,000

Inventory balances at the beginning and end of the year were as follows:

	Beginning of Year			End of Year
Raw materials	$	57,000		$	33,000
Work in process		?		$	30,000
Finished goods	$	31,000			?

The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $666,000; and the net operating income was $31,000. The companys overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.

Required:

a.

Prepare a schedule of cost of goods manufactured. SUPERIOR COMPANY Schedule of Cost Goods Manufactured Direct materials: Raw materials inventory, beginning $57,000 Add: Purchase of raw materials 266,000 Raw materials available 323,000 33,000 Raw materials used in production $290,000 Direct labor 64,000 Manufacturing overhead applied to work in process inventory 336,000 Total manufacturing costs 690,000 Add: Work in process inventory, beginning Cost of goods manufactured $750,000

b.	Prepare a schedule of cost of goods sold. SUPERIOR COMPANY Schedule of Cost of Goods Sold Add: Cost of goods manufactured Less: Finished goods inventory, ending Add: Underapplied overhead 20,000 Adjusted cost of goods sold $686,000

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