Question
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses | $ 214,000 |
---|---|
Purchases of raw materials | $ 268,000 |
Direct labor | $15,000 |
Administrative expenses | $ 159,000 |
Manufacturing overhead applied to work in process | $ 373,000 |
Actual manufacturing overhead cost | $ 355,000 |
Inventory balances at the beginning and end of the year were as follows:
Beginning | Ending | |
---|---|---|
Raw materials | $ 54,000 | $ 40,000 |
Work in process | $45,000 | $ 24,000 |
Finished goods | $ 39,000 | $61,000 |
The total manufacturing costs added to production for the year were $670,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $669,000; and the net operating income was $33,000. The companys underapplied or overapplied overhead is closed to Cost of Goods Sold.
Superior Company | ||
Income Statement | ||
Sales | $1,057,000 | |
Cost of goods sold | 651,000 | |
Gross margin | 406,000 | |
Selling and administrative expenses: | ||
Selling expenses | $214,000 | |
Administrative expenses | 159,000 | |
373,000 | ||
Net operating income | $33,000 |
Superior Company | |
Schedule of Cost of Goods Sold | |
Beginning finished goods inventory | $39,000 |
Add: Cost of goods manufactured | 691,000 |
Cost of goods available for sale | 730,000 |
Less: Ending finished goods inventory | 61,000 |
Unadjusted cost of goods sold | 669,000 |
Less: Overapplied overhead | 18,000 |
Adjusted cost of goods sold | $651,000 |
Superior Company | |||
Schedule of Cost Goods Manufactured |
Beginning wok in progress inventory | $45,000 | ||
Direct materials: | |||
Beginning raw materials inventory | $54,000 | ||
Add: Purchases of raw materials | 268,000 | ||
Total raw materials available | 322,000 | ||
Less: Ending raw materials inventory | 40,000 | ||
Direct materials used in production | $282,000 | ||
Direct labor | 15,000 | ||
Manufacturing overhead applied to work in process | 373,000 | ||
Total manufacturing costs added to production | 670,000 | ||
Total manufacturing costs to account for | 715,000 | ||
Less: Ending work in process inventory | 24,000 | ||
Cost of goods manufactured | $691,000 |
1. Write the journal entries for the following:
a) Raw Material purchased on account
b) Raw Material used as direct material
c) Recognition of direct labor owed to employees
d) Application of overhead to work-in-process
e) Recognition of Cost of Goods Manufactured
f) Recognition of Sales Revenue
g) Recognition of Cost of Goods Sold
h) Incurrence of actual overhead costs (use various to represent multiple accounts).
i) Clear the over/under applied overhead from the overhead account to COGS.
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