Exercise 3-6 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]

The following data from the just completed year are taken from the accounting records of Mason Company:

Sales	$ 659,000
Direct labor cost	$ 87,000
Raw material purchases	$ 138,000
Selling expenses	$ 105,000
Administrative expenses	$ 41,000
Manufacturing overhead applied to work in process	$ 227,000
Actual manufacturing overhead costs	$ 201,000

Inventories	Beginning	Ending
Raw materials	$ 8,300	$ 10,000
Work in process	$ 5,200	$ 20,600
Finished goods	$ 78,000	$ 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.