Question

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

Selling expenses	$	230,000
Purchases of raw materials	$	276,000
Direct labor		?
Administrative expenses	$	164,000
Manufacturing overhead applied to work in process	$	349,000
Total actual manufacturing overhead costs	$	385,000

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

	Beginning of Year			End of Year
Raw materials	$	65,500		$	31,300
Work in process		?		$	35,500
Finished goods	$	38,300			?

The total manufacturing costs for the year were $698,000; the cost of goods available for sale totaled $738,000; the unadjusted cost of goods sold totaled $669,500; and the net operating income was $45,500. The company’s overapplied or underapplied overhead is closed entirely to cost of goods sold. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

Required:

a.	Prepare a schedule of cost of goods manufactured.

       

   

b.	Prepare a schedule of cost of goods sold.

         

c.	Prepare an income statement for the year.

         

Answer 1