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Sales $ 659,000 Direct labor cost $ 81,000 Raw material purchases $ 135,000 Selling expenses $ 100,000 Administrative expenses $ 43,000 Manufacturing overhead applied to

Sales $ 659,000
Direct labor cost $ 81,000
Raw material purchases $ 135,000
Selling expenses $ 100,000
Administrative expenses $ 43,000
Manufacturing overhead applied to work in process $ 203,000
Actual manufacturing overhead costs $ 225,000

Inventories Beginning Ending
Raw materials $ 8,500 $ 10,800
Work in process $ 5,400 $ 20,600
Finished goods $ 74,000 $ 26,000

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.

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