Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses...................................$140,000
Purchases of raw materials.....................$290,000
Direct Labor...........................................?
Administrative expenses............................$100,000
Manufacturing overhead applied to work in process..............$285,000
Total actual manufacturing overhead costs...........................$270,000
Inventory balances at the beginning and end of the year:
Beginning End
Raw materials $40,000 $10,000
Work in process ? $35,000
Finished goods $50,000 ?
The total manufacturing costs for the year were $683,000: the cost of goods available for sale totaled $740,000: the unadjusted cost of goods sold totaled $660,000: and the net operating income was $30,000. The company's over applied or under applied overhead is closed entirely 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.