Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Selling expenses	$	217,000
Purchases of raw materials	$	264,000
Direct labor		?
Administrative expenses	$	154,000
Manufacturing overhead applied to work in process	$	371,000
Actual manufacturing overhead cost	$	360,000

Inventory balances at the beginning and end of the year were as follows:

	Beginning of Year			End of Year
Raw materials	$	55,000		$	34,000
Work in process		?		$	25,000
Finished goods	$	38,000			?

The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $36,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.

1) Prepare an Income Statement

2) Prepare a Schedule of Cost of Goods Sold

Answer 1