Question

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3) Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ 213,000 $ 267,000 ? $ 154,000 $367,000 $ 356,000 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 $ 36,000 7 $ 32,000 $ 36,000 ? The total manufacturing costs for the year were $670,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $32,000. 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.) Complete this question by entering your answers in the tabs below.

Answer 1

	Superior Company
	Income Statement
	Sales		$ 10,97,000
Deduct:	Cost of Goods Sold		$   6,98,000
	Gross Margin		$   3,99,000
Deduct:	Selling and Administrative Expenses:
	Selling Expense	$ 2,13,000
	Administrative Expense	$ 1,54,000	$   3,67,000
	Net Operating Income		$       32,000
	Superior Company
	Schedule of Cost of Goods Sold
	Finished Goods Inventory Beginning	$     36,000
	Cost of goods manufactured	$ 6,94,000
	Cost of goods available for sale	$ 7,30,000
Deduct:	Finished Goods Inventory Ending	$     67,000
	Unadjusted cost of goods sold	$ 6,63,000
Add:	Underapplied Overheads	$     35,000
	Adjusted cost of goods sold	$ 6,98,000
	Superior Company
	Schedule of Cost of goods Manufactured
	Direct Materials
	Raw Material Inventory beginning	$     54,000
Add:	Purchases of raw Material	$ 2,67,000
	Total Raw Material available	$ 3,21,000
Deduct:	Raw Material Inventory ending	$     36,000
	Raw Material used in production		$   2,85,000
	Direct Labor		$       18,000
	Manufacturing overheads applied to work in process inventory		$   3,67,000
	Total manufacturing cost		$   6,70,000
Add:	Beginning work in process inventory		$       56,000
			$   7,26,000
Deduct:	Ending work in process inventory		$       32,000
	Cost of goods manufactured		$   6,94,000