Question

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

Sales	$	653,000
Direct labor cost	$	85,000
Raw material purchases	$	136,000
Selling expenses	$	110,000
Administrative expenses	$	45,000
Manufacturing overhead applied to work in process	$	208,000
Actual manufacturing overhead costs	$	221,000

Inventories	Beginning		Ending
Raw materials	$	8,200	$	10,300
Work in process	$	5,300	$	20,000
Finished goods	$	75,000	$	25,800

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.

Answer 1

Solution

Mason company
Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning	$          8,200.00
Raw material Purchased	$     136,000.00
Raw material available for use	$     144,200.00
Less: Raw material Inventory Ending	$        10,300.00
Direct Material Used		$      133,900.00
Direct labor		$         85,000.00
Total Manufacturing overheads		$      208,000.00
Total manufacturing Cost During the month		$      426,900.00
Add: Work in process Beginning		$           5,300.00
Total Work in Process		$      432,200.00
Less: Work in progress Ending		$         20,000.00
Cost of Goods Manufactured		$      412,200.00

..

Mason company
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$         75,000.00
Add: Cost of goods manufactured		$      412,200.00
Goods Available for sale		$      487,200.00
Less :Ending Finished goods Inventory		$         25,800.00
Unadjusted Cost of Goods Sold		$      461,400.00
Underapplied Manufacturing overheads		$         13,000.00
Adjusted cost of goods sold		$      474,400.00