Superior Company provided the following data for the year endedDecember 31 (all raw materials...

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Accounting

Superior Company provided the following data for the year endedDecember 31 (all raw materials are used in production as directmaterials):
Selling expenses $ 140,000
Purchases of raw materials $ 290,000
Direct labor ?
Administrative expenses $ 100,000
Manufacturing overhead appliedto work in process $ 285,000
Actual manufacturing overheadcost $ 270,000
Inventory balances at the beginning and end of the year were asfollows:
Beginning of Year End of Year
Raw materials $ 40,000 $ 10,000
Work in process ? $ 35,000
Finished goods $ 50,000 ?
The total manufacturing costs for the year were $683,000; thecost of goods available for sale totaled $740,000; the unadjustedcost of goods sold totaled $660,000; and the net operating incomewas $30,000. The company’s underapplied or overapplied overhead isclosed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost ofgoods sold and an income statement. (Hint: Prepare theincome statement and schedule of cost of goods sold first followedby the schedule of cost of goods manufactured.)

Answer & Explanation Solved by verified expert

4.2 Ratings (903 Votes)

AnswerManufacturing overhead applied to work in process 285000Actual manufacturing overhead cost 270000Hence overapplied overhead 285000 270000 15000Unadjusted cost of goods sold 660000Less Overhead overapplied 15000Adjusted cost of goods sold 660000 15000 645000Net Operating Profit 30000Selling See Answer

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Transcribed Image Text

In: AccountingSuperior Company provided the following data for the year endedDecember 31 (all raw materials are...Superior Company provided the following data for the year endedDecember 31 (all raw materials are used in production as directmaterials):Selling expenses$140,000Purchases of raw materials$290,000Direct labor?Administrative expenses$100,000Manufacturing overhead appliedto work in process$285,000Actual manufacturing overheadcost$270,000Inventory balances at the beginning and end of the year were asfollows:Beginning of YearEnd of YearRaw materials$40,000$10,000Work in process?$35,000Finished goods$50,000?The total manufacturing costs for the year were $683,000; thecost of goods available for sale totaled $740,000; the unadjustedcost of goods sold totaled $660,000; and the net operating incomewas $30,000. The company’s underapplied or overapplied overhead isclosed to Cost of Goods Sold.Required:Prepare schedules of cost of goods manufactured and cost ofgoods sold and an income statement. (Hint: Prepare theincome statement and schedule of cost of goods sold first followedby the schedule of cost of goods manufactured.)


Selling expenses	$	140,000
Purchases of raw materials	$	290,000
Direct labor		?
Administrative expenses	$	100,000
Manufacturing overhead appliedto work in process	$	285,000
Actual manufacturing overheadcost	$	270,000

	Beginning of Year		End of Year
Raw materials	$	40,000	$	10,000
Work in process		?	$	35,000
Finished goods	$	50,000		?