Question

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 $ 81,000 $ 138,000 $ 108,000 $ 46,000 $ 201,000 $ 225,000 Inventories Raw materials Work in process Finished goods Beginning $ 8,300 $ 5,400 $ 77,000 Ending $ 10,300 $ 20,500 $ 25,800 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. Mason Company Schedule of Cost of Goods Manufactured Direct materials: Beginning raw materials inventory Add: Purchases of raw materials Total raw materials available Less: Ending raw materials inventory Raw materials used in production Direct labor Manufacturing overhead Total manufacturing costs Add: Beginning work in process inventory 0 Less: Ending work in process inventory Cost of goods manufactured

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.

Answer 1

solution: Schedule Cost of Goods Manufactured Direct material: Beginning raw materials inventory Add: Raw material purchases Raw material available Less: Ending raw materials inventory Raw materials used in production Direct Labor Manufacturing overhead Total manufacturing costs Add :Beginning work in process inventory Schedule Cost of Goods sold Beginning finished goods inventory Add: Cost of goods manufactured Goods available for sale Deduct: Ending finished goods inventory Unadjusted Cost of goods sold Add : Underapplied overhead** Adjusted Cost of goods sold 77000 402900 479900 25800 454100 24000 478100 8300 138000 146300 10300 136000 81000 201000 418000 5400 423400 20500 402900 657000 478100 178900 Deduct: Ending work in process inventory Cost of goods manufactured Income statement Sales Less: cost of goods sold Gross margin Less: selling and administrative expenses selling expense Administrative expense Net operating income 108000 46000 154000 24900 ead **working Actual manufacturing overhead applied underapplied overhead 225000 201000 24000