Problem
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
|
$ 262,000
|
|
Direct labor
|
?
|
|
Administrative expenses
|
$ 156,000
|
|
Manufacturing overhead applied to work in process
|
$ 369,000
|
|
Actual manufacturing overhead cost
|
$ 356,000
|
Inventory balances at the beginning and end of the year were as follows:
|
|
Beginning
|
Ending
|
|
Raw materials
|
$ 53,000
|
$ 33,000
|
|
Work in process
|
?
|
$ 33,000
|
|
Finished goods
|
$ 37,000
|
?
|
The total manufacturing costs added to production for the year were $680,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $33,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold.
Task
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.)