The following data from the just completed year are taken from the accounting records of Kenton Company: Sales $ 975,000 Direct labor cost $ 165,000 Raw material purchases $ 229,000 Selling expense $ 48,750 Administrative expenses $ 146,250 Manufacturing overhead applied to work in process $ 180,000 Actual manufacturing overhead costs $ 175,050 Inventories: Beginning Ending Raw materials $ 18,000 $ 17,500 Work in process $ 20,000 $ 14,750 Finished goods $ 9,000 $ 11,000 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
Q# 1: Accounting for Manufacturing Concern
The following data from the just completed year are taken from the accounting records of Kenton
Company:
Sales $ 975,000
Direct labor cost $ 165,000
Raw material purchases $ 229,000
Selling expense $ 48,750
Administrative expenses $ 146,250
Manufacturing
Actual
Inventories: Beginning Ending
Raw materials $ 18,000 $ 17,500
Work in process $ 20,000 $ 14,750
Finished goods $ 9,000 $ 11,000
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
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