Question

Problem 2-23A Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO2-6] Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 219,000 Purchases of raw materials $ 266,000 Direct labor ? Administrative expenses $ 158,000 Manufacturing overhead applied to work in process $ 332,000 Total actual manufacturing overhead costs $ 354,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 56,000 $ 37,000 Work in process ? $ 26,000 Finished goods $ 34,000 ? The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $745,000; the unadjusted cost of goods sold totaled $664,000; and the net operating income was $34,000. 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