Exercise 3-6 (Static) 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	$	524,000
Direct labor cost	$	70,000
Raw material purchases	$	118,000
Selling expenses	$	140,000
Administrative expenses	$	63,000
Manufacturing overhead applied to work in process	$	90,000
Actual manufacturing overhead costs	$	80,000

Inventories	Beginning		Ending
Raw materials	$	7,000	$	15,000
Work in process	$	10,000	$	5,000
Finished goods	$	20,000	$	35,000

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.