Question

In: Accounting

2. The following data from the just completed year are taken from the accounting records of...

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

sales

$700,000

direct labor cost

$100,000

raw material purchase

$115,000

selling expenses

$150,000

administrative expenses

$65,000

Manufacturing overhead applied to work in process

$100,000

Actual manufacturing overhead costs

$120,000

Inventories

Beginning

Ending

Raw materials

$10,000

$15,000

Work in process

$10,000

$2,000

Finished goods

$20,000

$35,000

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

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

C) Prepare an income statement

Solutions

Expert Solution

Requirement a

Mason company
Schedule of Cost of Goods Manufactured
Direct Material
Raw material Inventory Beginning $        10,000.00
Raw material Purchased $    1,15,000.00
Raw material available for use $    1,25,000.00
Less: Raw material Inventory Ending $        15,000.00
Direct Material Used $     1,10,000.00
Direct labor $     1,00,000.00
Manufacturing overheads applied $     1,00,000.00
Total manufacturing Cost $     3,10,000.00
Add: Work in process Beginning $         10,000.00
Total Work in Process $     3,20,000.00
Less: Work in progress Ending $           2,000.00
Cost of Goods Manufactured $     3,18,000.00
Schedule of cost of good ssold
Mason company
Schedule of cost of good sold
  
Beginning Finished Goods Inventory $         20,000.00
Add: Cost of goods manufactured $     3,18,000.00
Goods Available for sale $     3,38,000.00
Less :Ending Finished goods Inventory $         35,000.00
Unadjusted Cost of Goods Sold $     3,03,000.00
Underapplied Manufacturing overheads $         20,000.00
Adjusted cost of goods sold $     3,23,000.00
Mason company
Income statement
Sales revenue $     6,58,000.00
Less: Cost of goods sold $     3,23,000.00
Gross profit $     3,35,000.00
Selling and administrative expenses
Selling expenses $    1,50,000.00
Administrative expenses' $        65,000.00 $     2,15,000.00
Net income $     1,20,000.00

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