The following data from the just completed year are taken from the accounting records of Mason Company: Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $524,000Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000Raw material purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . $118,000Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . $63,000Manufacturing overhead applied to work in process . . . . $90,000Actual manufacturing overhead costs . . . . . . . . . . . . . . . . $80,000Inventories Beginning EndingRaw materials . . . . . . . . . . . . . . . . . . . . . . . $7,000 $15,000Work in process . . . . . . . . . . . . . . . . . . . . . $10,000 $5,000Finished goods . . . . . . . . . . . . . . . . . . . . . . $20,000 $35,000 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.
The following data from the just completed year are taken from the accounting records of Mason Company:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $524,000
Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000
Raw material purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . $118,000
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . $63,000
Manufacturing
Actual
Inventories Beginning Ending
Raw materials . . . . . . . . . . . . . . . . . . . . . . . $7,000 $15,000
Work in process . . . . . . . . . . . . . . . . . . . . . $10,000 $5,000
Finished goods . . . . . . . . . . . . . . . . . . . . . . $20,000 $35,000
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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