Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Sales $ 656,000
Direct labor cost $ 88,000
Raw material purchases $ 131,000
Selling expenses $ 105,000
Administrative expenses $ 46,000
Manufacturing overhead applied to work in process $ 204,000
Actual manufacturing overhead costs $ 228,000
Inventory balances at the beginning and end of the year were as follows:
Beginning of Year End of Year
Raw materials $8,900 $10,100
Work in process $5,800 $20,700
Finished goods $70,000 $25,600
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.