Superior Company provided the following account balnces for the year ended December 31 (all raw materials are used in production as direct materials):

Inventory balances at the beginning and end of the year were as follows:

Even though this firm outperformed the industry norm, it was still unprofitable to invest in because the opportunity cost is greater than the industry norm. Asa result, this analysis fails to support what might have been concluded using ratio analysis.

Required:

a. Prepare a schedule of cost of goods manufactured.

b. Prepare a schedule of cost of goods sold.

c. Prepare an income statement for the year.

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Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Total actual manufacturing overhead costs $ 211,000 $ 262,000 ? $ 154,000 $ 330,000 $ 353,000 Raw materials Work in process Finished goods Beginning of Year $ 52,000 ? $ 36,000 End of Year $ 38,000 $ 32,000 ? SUPERIOR COMPANY Schedule of Cost Goods Manufactured Direct materials: Raw materials inventory, beginning Add: Purchase of raw materials Raw materials available Less: Raw materials inventory, ending Raw materials used in production Direct labor Manufacturing overhead applied to work in process inventory Total manufacturing costs Add: Work in process inventory, beginning Less: Work in process inventory, ending Cost of goods manufactured $ 52,000 262,000 314,000 38,000 $ 276,000 74,000 330,000 680,000 680,000 32,000 $ 648,000 SUPERIOR COMPANY Schedule of Cost of Goods Sold Finished goods inventory, beginning Add: Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, ending Unadjusted cost of goods sold Less: Overapplied overhead Adjusted cost of goods sold $ 0 0 0 SUPEROIR COMPANY Income Statement Selling and administrative expenses: $ 0 0 0 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Total actual manufacturing overhead costs $ 211,000 $ 262,000 ? $ 154,000 $ 330,000 $ 353,000 Raw materials Work in process Finished goods Beginning of Year $ 52,000 ? $ 36,000 End of Year $ 38,000 $ 32,000 ? SUPERIOR COMPANY Schedule of Cost Goods Manufactured Direct materials: Raw materials inventory, beginning Add: Purchase of raw materials Raw materials available Less: Raw materials inventory, ending Raw materials used in production Direct labor Manufacturing overhead applied to work in process inventory Total manufacturing costs Add: Work in process inventory, beginning Less: Work in process inventory, ending Cost of goods manufactured $ 52,000 262,000 314,000 38,000 $ 276,000 74,000 330,000 680,000 680,000 32,000 $ 648,000 SUPERIOR COMPANY Schedule of Cost of Goods Sold Finished goods inventory, beginning Add: Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, ending Unadjusted cost of goods sold Less: Overapplied overhead Adjusted cost of goods sold $ 0 0 0 SUPEROIR COMPANY Income Statement Selling and administrative expenses: $ 0 0 0

Answer rating: 100% (QA)

a Superior Company Schedule of costs goods manufactured Direct materials Raw materials beginning 520... View the full answer