Superior company provided the following data for the

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Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter 10 / Exercise 10-77
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
Expert Verified
3-13 Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $  140,000Purchases of raw materials $290,000 Direct labor Administrative expenses $   100,000Manufacturing overhead applied to work in process $285,000 Actual manufacturing overhead cost $ 270,000Inventory balances at the beginning and end of the year were as follows: Beginning Ending Raw materials $40,000 $ 10,000 Work in process ? $35,000 Finished goods $50,000 The total manufacturing costs for the year were $683,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint:Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) ? ?
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Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter 10 / Exercise 10-77
Managerial Accounting: The Cornerstone of Business Decision-Making
Hansen/Mowen
Expert Verified
Schedule of cost of goods sold: Beginning finished goods inventory* ...................................$ 50,000 Add: Cost of goods manufactured ........................................690,000 Cost of goods available for sale* ...........................................740,000 Deduct: Ending finished goods inventory ............................80,000 Unadjusted cost of goods sold* .............................................660,000 Deduct: Overapplied overhead ($270,000 $285,000) .....15,000 Adjusted cost of goods sold ...................................................$645,000 Income statement: Sales .....................................................................................$915,000 Cost of goods sold ($660,000 $15,000) ..........................645,000 Gross margin .......................................................................270,000 Selling and administrative expenses: Selling expenses* .............................................................$140,000 Administrative expense* .................................................100,000 240,000 Net operating income* ........................................................$ 30,000 * Given in the problem

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