In: Accounting
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.
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 |