Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 214,000 Purchases of raw materials $ 268,000 Direct labor ? Administrative expenses $ 159,000 Manufacturing overhead applied to work in process $ 373,000 Actual manufacturing overhead cost $ 355,000 Inventory balances at the beginning and end of the year were as follows: Beginning Ending Raw materials $ 54,000 $ 40,000 Work in process ? $ 24,000 Finished goods $ 39,000 ? The total manufacturing costs added to production for the year were $670,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $33,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Prepare an income statement for the year. Prepare a schedule of cost of goods sold. Prepare a schedule of cost of goods manufactured.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Question

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

Selling expenses	$ 214,000
Purchases of raw materials	$ 268,000
Direct labor	?
Administrative expenses	$ 159,000
Manufacturing overhead applied to work in process	$ 373,000
Actual manufacturing overhead cost	$ 355,000

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

	Beginning	Ending
Raw materials	$ 54,000	$ 40,000
Work in process	?	$ 24,000
Finished goods	$ 39,000	?

The total manufacturing costs added to production for the year were $670,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $33,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.

Required:

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)