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materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Beginning and ending inventory balances were as follows: Raw materials Beginning $ 59,000 Work in process ? Finished goods $ 37,000 Ending $ 33,000 $ 29,000 ? $ 214,000 $ 264,000 ? $ 157,000 $ 367,000 $ 354,000 The total manufacturing costs added to production for the year were $690,000; the cost of goods available the unadjusted cost of goods sold totaled $665,000; and the net operating income was $36,000. The comp overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Pr statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Complete this question by entering your answers in the tabs below. Income Statement COGS Schedule COGM Schedule Prepare an income statement for the year. Superior Company Income Statement Selling and administrative expenses: < Income Stateinent 0 0 COGS Schedule > 

          materials):
Selling expenses
Purchases of raw materials
Direct labor
Administrative expenses
Manufacturing overhead applied to work in process
Actual manufacturing overhead cost
Beginning and ending inventory balances were as follows:
Raw materials
Beginning
$ 59,000
Work in process
?
Finished goods
$ 37,000
Ending
$ 33,000
$ 29,000
?
$ 214,000
$ 264,000
?
$ 157,000
$ 367,000
$ 354,000
The total manufacturing costs added to production for the year were $690,000; the cost of goods available
the unadjusted cost of goods sold totaled $665,000; and the net operating income was $36,000. The comp
overapplied overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Pr
statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
Complete this question by entering your answers in the tabs below.
Income
Statement
COGS
Schedule
COGM
Schedule
Prepare an income statement for the year.
Superior Company
Income Statement
Selling and administrative expenses:
< Income Stateinent
0
0
COGS Schedule >
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materials): Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost Beginning and ending inventory balances were as follows: Raw materials Beginning 59,000 Work in process ? Finished goods 37,000 Ending 33,000 29,000 ? 214,000 264,000 ? 157,000 367,000 354,000 The total manufacturing costs added to production for the year were690,000; the cost of goods available the unadjusted cost of goods sold totaled 665,000; and the net operating income was36,000. The comp overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Pr statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Complete this question by entering your answers in the tabs below. Income Statement COGS Schedule COGM Schedule Prepare an income statement for the year. Superior Company Income Statement Selling and administrative expenses: < Income Stateinent 0 0 COGS Schedule >

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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Income Statement Superior Company Income Statement Selling and administrative expenses: COGS Schedule COGM Schedule Purchases of raw materials $214,000 Direct labor $264,000 Manufacturing overhead applied to work in process $367,000 Actual manufacturing overhead cost $354,000 Beginning and ending inventory balances were as follows: Raw materials Beginning $59,000 Ending $33,000 Work in process Beginning $37,000 Ending $29,000 Finished goods The total manufacturing costs added to production for the year were $690,000; the cost of goods available the unadjusted cost of goods sold totaled $665,000; and the net operating income was $36,000. The comp overapplied overhead is closed to Cost of Goods Sold.
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Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $520,000 of total manufacturing overhead for an estimated activity level of 65,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company’s warehouse. The company’s cost records revealed the following actual cost and operating data for the year: Machine-hours 54,000 Manufacturing overhead cost $ 488,000 Inventories at year-end: Raw materials $ 19,000 Work in process (includes overhead applied of $25,920) $ 117,000 Finished goods (includes overhead applied of $73,440) $ 331,500 Cost of goods sold (includes overhead applied of $332,640) $ 1,501,500 Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to Work in Process, Finished Goods, and Cost of Goods Sold rather than being closed to Cost of Goods Sold?

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Transcript

-
00:01 Here, overhead rate is equal to 520000 divided by 65000 that is equal to 8 per machine hour.
00:20 Now, applied overhead is equal to 540000 divided by 8 that is equal to 432000.
00:36 Then, actual overhead is equal to 488000.
00:47 Then, under applied overhead is equal to 432000 minus 488000 that is equal to 56000.
01:06 Now, we have to do the adjusting entry.
01:09 So, here we will write date, then account and explanation, then here we will write debited amount and here we will write credited amount.
01:22 So, for the entry 1, cost of goods sold, debited with 56000, manufacturing overhead, crediting with 56000...
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