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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 140,000
Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 290,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 100,000
Manufacturing overhead applied to work in process . . . . . . . . . $ 285,000
Total actual manufacturing overhead costs . . . . . . . . . . . . . . . . $ 270,000
Inventory balances at the beginning and end of the year were as follows:

The total manufacturing costs for the year were $ 683,000; the cost of goods available for sale totaled $ 740,000; the unadjusted cost of goods sold totaled $ 660,000; and the net operating income was $ 30,000. The company€™s overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.

Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.

Transcribed Image Text:

Beginning of Year $40,000 $50,000 End of Year Raw materials... Work in process.... $10,000 $35,000 Finished goods