Superior Company provided the following data for the year ended December 31 (all raw materials are...

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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 $ 210,000
Purchases of raw materials $ 265,000
Direct labor ? Administrative expenses $ 155,000
Manufacturing overhead applied to work in process $ 371,000
Actual manufacturing overhead cost $ 356,000
Inventory balances at the beginning and end of the year were asfollows:
Beginning of Year End of Year
Raw Materials 54,000 36,000
Work in Process 31,000
Finished Goods 39,000
The total manufacturing costs for the year were $680,000; thecost of goods available for sale totaled $720,000; the unadjustedcost of goods sold totaled $666,000; and the net operating incomewas $36,000. 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 the incomestatement and schedule of cost of goods sold first followed by theschedule of cost of goods manufactured.)

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3.6 Ratings (334 Votes)

Raw material consumed Beginning Inventory of RM 54000 Add Purchases 265000 Material available for use 319000 Less Ending Inventory of RM 36000 Raw material consumed 283000 Direct Labor cost Total Manufacturing Cost 680000 Less Material consumed 283000 Less Mmanufacturing OH applied 371000 Direct Labor cost 26000 Beginning WIP inventory Cost of Goods See Answer

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Transcribed Image Text

Superior Company provided the following data for the year endedDecember 31 (all raw materials are used in production as directmaterials):Selling expenses $ 210,000Purchases of raw materials $ 265,000Direct labor ? Administrative expenses $ 155,000Manufacturing overhead applied to work in process $ 371,000Actual manufacturing overhead cost $ 356,000Inventory balances at the beginning and end of the year were asfollows:Beginning of YearEnd of YearRaw Materials54,00036,000Work in Process31,000Finished Goods39,000The total manufacturing costs for the year were $680,000; thecost of goods available for sale totaled $720,000; the unadjustedcost of goods sold totaled $666,000; and the net operating incomewas $36,000. 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 the incomestatement and schedule of cost of goods sold first followed by theschedule of cost of goods manufactured.)

	Beginning of Year	End of Year
Raw Materials	54,000	36,000
Work in Process		31,000
Finished Goods	39,000