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

Selling expenses	$	211,000
Purchases of raw materials	$	263,000
Direct labor		?
Administrative expenses	$	153,000
Manufacturing overhead applied to work in process	$	331,000
Total actual manufacturing overhead costs	$	358,000

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

	Beginning of Year			End of Year
Raw materials	$	56,000		$	32,000
Work in process		?		$	29,000
Finished goods	$	32,000			?

The total manufacturing costs for the year were $670,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled $663,000; and the net operating income was $37,000. The companys overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.

(Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

b. Prepare a schedule of cost of goods sold. SUPERIOR COMPANY Schedule of Cost of Goods Sold 32,000 703,000 735,000 Finished goods inventory, beginning Add: Cost of goods man Cost of goods available for sale Less: Finished goods inventory, ending Unadjusted cost of goods sold Add: Underapplied overhead Adjusted cost of goods sold c. Prepare an income statement for the year SUPEROIR COMPANY Income Statement Sales Cost of goods sold Selling and administrative expenses 0