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16 October, 03:42

The following data from the just completed year are taken from the accounting records of Mason Company: Sales $ 654,000 Direct labor cost $ 88,000 Raw material purchases $ 135,000 Selling expenses $ 107,000 Administrative expenses $ 42,000 Manufacturing overhead applied to work in process $ 200,000 Actual manufacturing overhead costs $ 225,000 Inventories Beginning Ending Raw materials $ 8,800 $ 10,800 Work in process $ 6,000 $ 20,400 Finished goods $ 79,000 $ 25,000 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.

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  1. 16 October, 06:04
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    Instructions are listed below

    Explanation:

    Giving the following information:

    Sales $ 654,000

    Direct labor cost $ 88,000

    Raw material purchases $ 135,000

    Selling expenses $ 107,000

    Administrative expenses $ 42,000

    Manufacturing overhead applied to work in process $ 200,000

    Actual manufacturing overhead costs $ 225,000

    Inventories Beginning Raw materials $ 8,800

    Ending inventories Raw materials $ 10,800

    Beginning Work in process $ 6,000

    Ending Work in process $ 20,400

    Beginning Finished goods $ 79,000

    Ending finished goods $ 25,000

    1) cost of goods manufactured:

    Beginning Work in process $ 6,000

    Inventories Beginning Raw materials $ 8,800

    Raw material purchases $ 135,000

    Ending inventories Raw materials $ 10,800 (-)

    Direct labor cost $ 88,000

    Manufacturing overhead applied to work in process $ 200,000

    Ending Work in process $ 20,400 (-)

    Total = $406,600

    2) Cost of goods sold:

    Beginning Finished goods $ 79,000

    cost of goods manufactured $406,600

    Ending finished goods $ 25,000 (-)

    Underapplied overhead = 25,000 (+)

    Total COGS = $485,600

    3) Income statement:

    Sales = 654,000

    COGS = 485,600

    Gross income = $168,400

    Selling expenses $ 107,000

    Administrative expenses $ 42,000

    Net operating income = $19,400
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