Question

PLEASE SHOW how you got your numbers (calculations) thank you :)

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

Selling expenses	$	219,000
Purchases of raw materials	$	262,000
Direct labor		?
Administrative expenses	$	155,000
Manufacturing overhead applied to work in process	$	373,000
Actual manufacturing overhead cost	$	358,000

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

	Beginning of Year			End of Year
Raw materials	$	54,000		$	37,000
Work in process		?		$	31,000
Finished goods	$	34,000			?

The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $36,000. 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.)

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ 219,000 $ 262,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 155,000 $ 373,000 $ 358,000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year End of Year $ 54,000 $ 37,000 7 $ 31,000 $ 34,000 The total manufacturing costs for the year were $690,000, the cost of goods available for sale totaled $745,000, the unadjusted cost of goods sold totaled $663,000, and the net operating income was $36,000. 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)

Answer 1

Workings: Superior Company Income Statement Cost of goods available for sale Less: Unadjusted cost of goods sold Ending Finished Goods Inventory For the year ended December 31 $745,000 $663,000 $82,000 [$745000 - $663000] Sales $1,058,000 $648,000 Cost of Goods Sold (Adjusted) $410,000 Gross Profit $690,000 -$373,000 -$279,000 [$54,000 + $262,000 - $37,000] $38,000 Total manufacturing costs for the year Less: Mfg. overhead costs applied to WIP Operating Expenses: $219,000 Selling Expenses Administrative Expenses $155,000 Less: Direct materials used in the WIP $374,000 Direct labor cost Total Operating Expenses $36,000 Operating Income $36,000 Net Operating income Superior Company Add: Schedule of Cost of Goods Sold $219,000 $155,000 $410,000 Selling Expenses Administrative Expenses For the year ended December 31 $711,000 $34,000 $745,000 -$82,000 $663,000 Cost of Goods Manufactured Gross Profit $663,000 Add: Beginning Finished Goods Inventory Add: Unadjusted cost of goods sold Less: Over-applied mfg. overhead cost Adjusted Cost of goods sold Sales for the year [$373,000 - $358,000] -$15,000 Cost of Goods Available for Sale Less: Ending Finished Goods Inventory Undadjusted Cost of Goods Sold Less: Over-applied mfg. overhead cost Adjusted Cost of Goods Sold $648,000 $1,058,000 -$15,000 [$373,000 - $358,000] $648,000

Cost of goods available for sale Superior Company $745,000 $34,000 $711,000 [$745000 - $34000] Schedule of Cost of Goods Manufactured Less: Beginning Finished Goods Inventory For the year ended December 31 Cost of Goods Manufactured Beginning Work in Process Raw Materials, Beginning balance Add: Raw Materials purchased $52,000 Add: Ending WIP inventory Less: Total manufacturing costs for the year $31,000 $54,000 $262,000 -$690,000 $52,000 Beginning WIP Inventory $316,000 Cost of Raw Materials availabe on hand -$37,000 $279,000 $38,000 $373,000 Less: Raw Materials, Ending balance Direct materials used in the production Direct Labor Cost Mfg. Overhead applied to WIP Total Manufacturing Costs for the Year Total Cost of Work in Process Inventory $690,000 $742,000 -$31,000 $711,000 Less: Work in Process, Ending Balance Cost of Goods Manufactured