Discussion:
Schedule of Cost of Goods Manufactured; Income Statement; Cost Behavior [ LO2 , LO3 , LO4 , LO5 , LO6 ]
Selected account balances for the year ended December 31 are provided below for Superior Company:
Selling and administrative salaries . . . . . . . . . . . . $110,000
Purchases of raw materials . . . . . . . . . . . . . . . . . . $290,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . $80,000
Manufacturing overhead . . . . . . . . . . . . . . . . . . . . $270,000
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . $50,000
Inventory ba lances a t t he be ginning a nd end of t he ye ar w ere a s f ollows:
Beginning of End of
the Year the Year
Raw materials . . . . . . . . . . . . . . $40,000 $10,000
Work in process . . . . . . . . . . . . . ? $35,000
Finished goods . .......................... $50,000 ?
The total manufacturing costs for the year were $683,000; the goods available for sale totaled $740,000; and the cost of goods sold totaled $660,000.
Required:
1. Prepare a schedule of cost of goods manufactured and the cost of goods sold section of the company's income statement for the year.