Question

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

Sales $ 658,000
Direct labor cost $ 81,000
Raw material purchases $ 134,000
Selling expenses $ 107,000
Administrative expenses $ 42,000
Manufacturing overhead applied to work in process $ 224,000
Actual manufacturing overhead costs $ 207,000

Inventories Beginning   Ending
Raw materials $ 8,500   $ 10,200
Work in process  $ 5,400 $ 20,600
Finished goods $ 74,000    $ 25,900

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