Question

The following data from the just completed year are taken from the accounting records of Mason Company Sales Direct labor cost Rav material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs $ 658,000 $ 80,000 $ 136,000 $ 105,000 $ 47,000 $ 205,000 $ 229,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,700 $ 5,500 $ 71,000 Ending $ 10,500 $ 20,800 $ 25,900 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 Dransen halenfront of and manufactura Aeruime all mstariale rend in neurtinn wara Hirart materiale

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Answer 1

1. Cost of goods manufactued statement

2. Cost of goods sold statement

3. Income statement

If actual overhead is more than the applied overhead, the resultant will be underapplied overhead.

1. Schedule of cost of goods manufactured Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory 8,700 Add: Purchases of raw materials 136,000 Total raw materials available 144,700 Less: Ending raw materials inventory 10,500 Raw materials used in production Direct labor Manufacturing overhead applied to work in process Total manufacturing costs Add: Beginning work in process inventory 134,200 80,000 205,000 419,200 5,500 424,700 20,800 403,900 Less: Ending work in process inventory Cost of goods manufactured 2. Schedule of cost of goods sold Schedule of Cost of Goods Sold Beginning finished goods inventory Add: Cost of goods manufactured Cost of goods available for sale Less: Ending finished goods inventory Unadjusted cost of goods sold Add: Underapplied overhead Adjusted cost of goods sold 71,000 403,900 474,900 25,900 449,000 24,000 229,000-205,000, Actual overhead - Applied overhead 473,000 3. Income statement 658,000 473,000 185,000 Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Net operating income 105,000 47,000 152,000 33,000