Question

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

Sales $ 660,000

Direct labor cost $ 83,000

Raw material purchases $ 131,000

Selling expenses $ 101,000

Administrative expenses $ 40,000

Manufacturing overhead applied to work in process $ 209,000

Actual manufacturing overhead costs $ 224,000

Inventories	Beginning		Ending
Raw materials	$	8,900	$	10,500
Work in process	$	5,900	$	20,600
Finished goods	$	72,000	$	25,500

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.

Complete this question by entering your answers in the tabs below.

• Required 1

Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

	Mason Company Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production Total manufacturing costs Cost of goods manufactured

Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

	Mason Company Schedule of Cost of Goods Sold

Prepare an income statement.

	Mason Company Income Statement Selling and administrative expenses:

Answer 1

• [1]

Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw material inventory	$8,900
Add: Purchase of raw material	$131,000
Total raw materials available	$139,900
Less: Ending raw material inventory	$10,500
Raw material used in production		$129,400
Direct labor cost		$83,000
Manufacturing Overhead applied		$209,000
Total manufacturing costs		$421,400
Add: Beginning WIP Inventory		$5,900
Total cost of Work in Process		$427,300
Less: Ending WIP Inventory		$20,600
Cost of Goods manufactured		$406,700

• [2]

Schedule of Cost of Goods Sold
Befinning Finished Goods Inventory	$72,000
Add: Cost of Goods manufactured	$406,700
Cost of Goods available for sale	$478,700
Less: Ending finished goods inventory	$25,500
Unadjusted Cost of Goods Sold	$453,200
Add: Under applied Overheads	$15,000
Cost of Goods Sold [adjusted]	$468,200

• [3]

Sales		$660,000
Cost of Goods Sold		$468,200
Gross Profits		$191,800
Operating Expenses:
Selling expense	$101,000
Administrative expense	$40,000
Total Operating Expense		$141,000
Net Income		$50,800