Question

Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement (LO3-3) The following data from the just completed year are taken from the accounting records of Mason Company: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs $ 657,000 $ 82,000 $ 134, Bee $ 184,000 $ 43,000 $ 200,000 $ 220,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,500 $ 5,400 $ 75,000 Ending $10.400 $ 20,300 $25,700 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. Wason Company Schedule of Cost of Goods Manufactured Directa < Prev 67

Answer 1

Solution

Mason company
Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning	$ 8,500
Raw material Purchased	$ 134,000
Raw material available for use	$ 142,500
Less: Raw material Inventory Ending	$ 10,400
Direct Material Used		$ 132,100
Direct labor		$ 82,000
Manufacturing overheads applied		$ 200,000
Total manufacturing Cost During the month		$ 414,100
Add: Work in process Beginning		$ 5,400
Total Work in Process		$ 419,500
Less: Work in progress Ending		$ 20,300
Cost of Goods Manufactured		$ 399,200

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Mason company
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$ 76,000
Add: Cost of goods manufactured		$ 399,200
Goods Available for sale		$ 475,200
Less :Ending Finished goods Inventory		$ 25,700
Unadjusted Cost of Goods Sold		$ 449,500
Underapplied Manufacturing overheads		$ 20,000
Adjusted cost of goods sold		$ 469,500

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Mason company
Income statement
Sales revenue		$ 657,000
Less: Cost of goods sold		$ 469,500
Gross profit		$ 187,500
Selling and administrative expenses
Selling expenses	$ 104,000
Administrative expenses'	$ 43,000	$ 147,000
Net income		$ 40,500