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 $218,000 Purchases of raw materials $260,000 Direct labor ? Administrative expenses $151,000 Manufacturing overhead applied to work in process $337,000 Total actual manufacturing overhead costs $354,000 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 ? $ 26,000 Finished goods $ 39,000 ? The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $750,000; the unadjusted cost of goods sold totaled $664,000; and the net operating income was $36,000. The company's 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 food a. Prepare a schedule of cost of goods manufactured. SUPERIOR COMPANY Schedule of Cost Goods Manufactured Direct materials: Raw materials inventory, beginning Add: Purchase of raw materials Raw materials available Less: Raw materials inventory, ending Raw materials used in production Direct labor Manufacturing overhead applied to work in process inventory Total manufacturing costs Add: Work in process inventory, beginning 56,000 260,000 316,000 32,000 $ 284,000 54,000 337,000 675,000 26,000 Less: Work in process inventory, ending Cost of goods manufactured SUPERIOR COMPANY Schedule of Cost of Goods Sold Adjusted cost of goods sold c. Prepare an income statement for the year. SUPEROIR COMPANY Income Statement Selling and administrative expenses: 0