Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses $ 216,000
Purchases of raw materials $ 267,000
Direct labor ?
Administrative expenses $ 155,000
Manufacturing overhead applied to work in process $ 371,000
Actual manufacturing overhead cost $ 351,000
Inventory balances at the beginning and end of the year were as follows:
Beginning of Year End of Year
Raw materials $ 55,000 $ 37,000
Work in process ? $ 25,000
Finished goods $ 34,000 ?
The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $661,000; and the net operating income was $35,000. 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.)