Chater 3 Problem Superior Company provided the following data for the year ended
ID: 2594248 • Letter: C
Question
Chater 3 Problem
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Inventory balances at the beginning and end of the year were as follows:
The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $34,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
Prepare an income statement for the year.
Prepare a schedule of cost of goods sold.
Prepare a schedule of cost of goods manufactured.
Selling expenses $ 217,000 Purchases of raw materials $ 268,000 Direct labor ? Administrative expenses $ 155,000 Manufacturing overhead applied to work in process $ 372,000 Actual manufacturing overhead cost $ 355,000Explanation / Answer
Superior Company Statement of cost of goods sold Amount in $ Finished goods beginning 40000 Add: cost of goods manufactured 680000 Cost of goods available for sale 720000 Less: Endinig Finished goods (720,000-661,000) 59000 Unadjusted Cost of goods sold * 661000 Less: overapplied overhead(372000-355000) 17000 Adjusted cost of goods sold 644000 Superior Company Statement of Income statement Amount in $ Sales (644000+406000) 1050000 Cost of goods sold 644000 Gross margin (34000+155000+217000) 406000 Selling & a dmin Expenses 217000 Admin Expenses 155000 net Operating income 34000