exercise: Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 140,000 Purchases of raw materials $ 290,000 Direct labor ? Administrative expenses $ 100,000 Manufacturing overhead applied to work in process $ 285,000 Actual manufacturing overhead cost $ 270,000 Beginning and ending inventory balances were as follows:   Beginning Ending Raw materials $ 40,000 $ 10,000 Work in process ? $ 35,000 Finished goods $ 50,000 ? The total manufacturing costs added to production for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. 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.)

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...
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 exercise: Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Selling expenses $ 140,000
Purchases of raw materials $ 290,000
Direct labor ?
Administrative expenses $ 100,000
Manufacturing overhead applied to work in process $ 285,000
Actual manufacturing overhead cost $ 270,000

Beginning and ending inventory balances were as follows:

  Beginning Ending
Raw materials $ 40,000 $ 10,000
Work in process ? $ 35,000
Finished goods $ 50,000 ?

The total manufacturing costs added to production for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. 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.)

 

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