Question

The following data from the just completed year are taken from the accounting records of Mason Company:

Sales $ 659,000

Direct labor cost $ 81,000

Raw material purchases $ 135,000

Selling expenses $ 110,000

Administrative expenses $ 50,000

Manufacturing overhead applied to work in process $ 208,000

Actual manufacturing overhead costs $ 225,000

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.

(Please write the answers in a piece of paper in a format where it is clearly visible)

Answer 1

Scedule of cost of goods manufactured

Particulars	Details	Amount ($)
Direct Material Consumed		132600
Opening stock of Raw Material	8300
+ Purchases of Raw Material	135000
- Closing Stock of Raw Material	10700
Total Manufacturing Cost		438600
Direct Material	132600
+Direct Labour	81000
+ Direct Overheads	225000
Cost of Goods Manufactured		423200
Total Manufacturing Cost	438600
+ Opening Work in Progress	5500
- Closing Work in Progress	20900
Cost of Goods Sold		519000
Opening Stock of Finished Goods	70000
+ Cost of Goods Manufactured	423200
– Closing Stock of Finished Goods	25800

Schedule of Cost of Goods Sold

Particulars	Amount ($)
Beginning inventory(Raw Material+WIP+Finished Goods)	83800
+ Purchases	135000
+ Direct labor	81000
+ Factory overhead	225000
+Administrative Expenses	50000
+Selling Expenses	110000
= Cost of goods available for sale	684800
- Ending inventory	57400
Cost of Goods Sold	627400

Income Statement

Particulars	Amount ($)
Sales	659000
+Cost of Sales	684800
Gross Profit	1343800
Administrative Exps	50000
Selling Exps	110000
Profit Before Tax	1503800