Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses$214,000Purchases of raw materials$265,000Direct labor ?Administrative expenses$156,000Manufacturing overhead applied to work in process$371,000Actual manufacturing overhead cost$354,000 Inventory balances at the beginning and end of the year were as follows: BeginningEndingRaw materials$52,000 $35,000 Work in process ? $30,000 Finished goods$37,000 ? The total manufacturing costs added to production for the year were $685,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $38,000. 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.)

The question is based on the concept of Cost Accounting.

Answered: Superior Company provided the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):


Selling expenses	$	214,000
Purchases of raw materials	$	265,000
Direct labor		?
Administrative expenses	$	156,000
Manufacturing overhead applied to work in process	$	371,000
Actual manufacturing overhead cost	$	354,000

Inventory balances at the beginning and end of the year were as follows:

	Beginning	Ending
Raw materials	$	52,000	$	35,000
Work in process		?	$	30,000
Finished goods	$	37,000		?

The total manufacturing costs added to production for the year were $685,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $38,000. 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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