1.Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Selling expenses	$	219,000
Purchases of raw materials	$	261,000
Direct labor		?
Administrative expenses	$	159,000
Manufacturing overhead applied to work in process	$	369,000
Actual manufacturing overhead cost	$	356,000

Inventory balances at the beginning and end of the year were as follows:

	Beginning of Year			End of Year
Raw materials	$	59,000		$	36,000
Work in process		?		$	24,000
Finished goods	$	36,000			?

The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $38,000. The companys 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.)

2.Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $122,200 of manufacturing overhead for an estimated allocation base of $94,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:

Purchase of raw materials	$	136,000
Direct labor cost	$	90,000
Manufacturing overhead costs:
Indirect labor	$	119,700
Property taxes	$	8,900
Depreciation of equipment	$	16,000
Maintenance	$	12,000
Insurance	$	7,200
Rent, building	$	33,000

	Beginning		Ending
Raw Materials	$	26,000	$	14,000
Work in Process	$	48,000	$	38,000
Finished Goods	$	70,000	$	61,000

Required:

2a. Compute the predetermined overhead rate for the year.

2b. Compute the amount of underapplied or overapplied overhead for the year.

2c. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.

2d. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.

2e. Assume that the $38,000 ending balance in Work in Process includes $8,900 of direct materials. Given this assumption, supply the information missing below:

3.

Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $372,000 of manufacturing overhead for an estimated allocation base of 1,200 direct labor-hours. The following transactions took place during the year:

1. Raw materials purchased on account, $240,000.
2. Raw materials used in production (all direct materials), $225,000.
3. Utility bills incurred on account, $67,000 (95% related to factory operations, and the remainder related to selling and administrative activities).
4. Accrued salary and wage costs:

Direct labor (1,275 hours)	$	270,000
Indirect labor	$	98,000
Selling and administrative salaries	$	150,000

5. Maintenance costs incurred on account in the factory, $62,000
6. Advertising costs incurred on account, $144,000.
7. Depreciation was recorded for the year, $80,000 (85% related to factory equipment, and the remainder related to selling and administrative equipment).
8. Rental cost incurred on account, $105,000 (90% related to factory facilities, and the remainder related to selling and administrative facilities).
9. Manufacturing overhead cost was applied to jobs, $?.
10. Cost of goods manufactured for the year, $850,000.
11. Sales for the year (all on account) totaled $1,600,000. These goods cost $880,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Raw Materials	$	38,000
Work in Process	$	29,000
Finished Goods	$	68,000

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post your entries to T-accounts. (Dont forget to enter the beginning inventory balances above.)

3. Prepare a schedule of cost of goods manufactured.

4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4B. Prepare a schedule of cost of goods sold.

5. Prepare an income statement for the year.