Question

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

Sales	$	653,000
Direct labor cost	$	81,000
Raw material purchases	$	131,000
Selling expenses	$	109,000
Administrative expenses	$	41,000
Manufacturing overhead applied to work in process	$	205,000
Actual manufacturing overhead costs	$	221,000

Inventories	Beginning		Ending
Raw materials	$	8,700	$	11,000
Work in process	$	5,700	$	20,600
Finished goods	$	73,000	$	25,700

Required:

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.

Answer 1