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	$	266,000
Direct labor		?
Administrative expenses	$	159,000
Manufacturing overhead applied to work in process	$	336,000
Total actual manufacturing overhead costs	$	356,000

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

	Beginning of Year			End of Year
Raw materials	$	57,000		$	33,000
Work in process		?		$	30,000
Finished goods	$	31,000			?

The total manufacturing costs for the year were $690,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $666,000; and the net operating income was $31,000. The companys overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.

Required:

a.

Prepare a schedule of cost of goods manufactured.

SUPERIOR COMPANY
Schedule of Cost Goods Manufactured
Direct materials:
Raw materials inventory, beginning	$57,000
Add: Purchase of raw materials	266,000
Raw materials available	323,000
	33,000
Raw materials used in production		$290,000
Direct labor		64,000
Manufacturing overhead applied to work in process inventory		336,000
Total manufacturing costs		690,000
Add: Work in process inventory, beginning
Cost of goods manufactured		$750,000

b.

Prepare a schedule of cost of goods sold.

SUPERIOR COMPANY
Schedule of Cost of Goods Sold
Add: Cost of goods manufactured
Less: Finished goods inventory, ending
Add: Underapplied overhead	20,000
Adjusted cost of goods sold	$686,000