Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses$214,000Purchases of raw materials$265,000Direct labor ?Administrative expenses$152,000Manufacturing overhead applied to work in process$363,000Actual manufacturing overhead cost$353,000
Inventory balances at the beginning and end of the year were as follows:
Beginning of YearEnd of YearRaw materials$57,000 $33,000 Work in process ? $29,000 Finished goods$32,000 ?
The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $37,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.
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.)