The following data from the just completed year are taken fr

The following data from the just completed year are taken from the accounting records of Mason Company: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs 654,000 $ 87,000 $ 139,000 $ 107,000 $ 50,000 203,000 226,000 Inventories Raw materials Work in process Finished goods Beginning Ending $ 8,200 10,300 $ 5,900 20,200 $77,000 25,900 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company\'s underapplied or overapplied overhead is closed to Cost of Goods Sold 3. Prepare an income statement.

Solution

Add: Underapplied Mfg. Overhead

(226,000 - 203,000)

Schedule Cost of Goods Manufactured
Opening Raw Material	8,200
Add: Raw material Purchased	139,000
Less: Closing Raw Material	(10,300)
Direct Material Used		136,900
Direct Labor		87,000
Manufacturing Overhead applied		203,000
Total Current Manufacturing Cost		426,900
Add: Opening WIP		5,900
Less: Closing WIP		(20,200)
Cost of Goods Manufactured		412,600