Problem
The following data from the just completed year are taken from the accounting records of Mason Company: Sales $ 655,000 Direct labor cost $ 88,000 Raw material purchases $ 137,000 Selling expenses $ 106,000 Administrative expenses $ 41,000 Manufacturing overhead applied to work in process $ 202,000 Actual manufacturing overhead costs $ 224,000 Inventories Beginning of Year End of Year Raw materials $ 8,200 $ 10,300 Work in process $ 5,200 $ 20,400 Finished goods $ 70,000 $ 25,200.
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.
3. Prepare an income statement.