The following data from the justcompleted year are taken fro

The following data from the just-completed year are taken from the accounting records of Eccles Company: Sales Direct labour cost 699,000 98,000 140,000 108,000 51,000 218,000 236,000 Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs Beginning End of of Year $ 8,800 $10,800 5,800 20,800 70,800 25,800 Finished goods Required 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. ECCLESc

Solution

Cost of goods manufactured Direct materials Raw materials ,beginning of the year 8,800 add purchases 140,000 total raw materials available 148,800 less :Raw materials,end of year 10,800 Direct materials used in production 138,000 Direct labor cost 98,000 Manufacturing overhead applied to work in process 218,000 Total manufacturing cost 454,000 Add:Beginning work in process 5,800 less :ending work in process 20,800 Cost of goods manufactured 439,000 Schedule of cost of goods sold Finished goods inventory,Beginning 70,800 Add cost of goods manufactured 439,000 cost of goods available for sale 509,800 less finished goods inventory,ending 25,800 Unadjusted cost of good sold 484,000 Add:under applied overhead 18,000 Adjusted cost of goods sold 502,000 Income Statement sales 699,000 less cost of goods sold 502,000 Gross profit 197,000 Selling and administrative expense Selling expense 108,000 administrative expense 51,000 Net income 57,000