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 $ 219,000
Purchases of raw materials $ 263,000
Direct labor ?
Administrative expenses $ 151,000
Manufacturing overhead appliedto work in process $ 365,000
Actual manufacturing overheadcost $ 354,000
Inventory balances at the beginning and end of the year were asfollows:
Beginning of Year End of Year
Raw materials $ 50,000 $ 34,000
Work in process ? $ 26,000
Finished goods $ 32,000 ?
The total manufacturing costs for the year were $685,000; thecost of goods available for sale totaled $750,000; the unadjustedcost of goods sold totaled $664,000; and the net operating incomewas $38,000. 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.)

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3.6 Ratings (500 Votes)

	Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	50000
Add: Purchases of raw materials	263000
Total raw materials available	313000
Deduct: Raw materials inventory, ending	34000
Raw materials used in production		279000
Direct labor		41000
Manufacturing overhead applied to work in process inventory		365000
Total manufacturing costs		685000
Add: Beginning work in process inventory		59000
		744000
Deduct: Ending work in process inventory		26000
Cost of goods manufactured		718000

	Schedule of Cost of Goods Sold
Finished goods inventory, beginning		32000
Add: Cost of goods manufactured		718000
Cost of goods available for sale		750000
Deduct: Finished goods inventory, ending		86000
Unadjusted cost of goods sold		664000
Less: Overapplied overhead		11000
Adjusted cost of goods sold		653000

	Income Statement
Sales		1061000
Cost of goods sold		653000
Gross margin .		408000
Selling and administrative expenses:
Selling expenses	219000
Administrative expense	151000	370000
Net operating income		38000

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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$219,000Purchases of raw materials$263,000Direct labor?Administrative expenses$151,000Manufacturing overhead appliedto work in process$365,000Actual manufacturing overheadcost$354,000Inventory balances at the beginning and end of the year were asfollows:Beginning of YearEnd of YearRaw materials$50,000$34,000Work in process?$26,000Finished goods$32,000?The total manufacturing costs for the year were $685,000; thecost of goods available for sale totaled $750,000; the unadjustedcost of goods sold totaled $664,000; and the net operating incomewas $38,000. 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	$	219,000
Purchases of raw materials	$	263,000
Direct labor		?
Administrative expenses	$	151,000
Manufacturing overhead appliedto work in process	$	365,000
Actual manufacturing overheadcost	$	354,000

	Beginning of Year		End of Year
Raw materials	$	50,000	$	34,000
Work in process		?	$	26,000
Finished goods	$	32,000		?