Section B Answer ALL Questions: 50 Marks

Question 1: 20 Marks

Superior Manufacturing Company has the following cost and expense data for the year ending December 31, 2016:

Raw materials, January 1 $30,000 Insurancefactory $ 14,000

Raw materials, December 31 20,000 Property taxesfactory building 6,000

Raw materials purchased 205,000 Sales (net) 1,500,000

Indirect materials 15,000 Delivery expenses 100,000

Work in process, January 1 80,000 Sales commissions 150,000

Work in process, December 31 50,000 Indirect labour 90,000

Finished goods, January 1 110,000 Factory machinery rent 40,000

Finished goods, December 31 120,000 Factory utilities 65,000

Direct labour 350,000 Depreciationfactory building 24,000

Factory manager's salary 35,000 Administrative expenses 300,000

Instructions

(a) Prepare a cost of goods manufactured schedule for Superior Manufacturing Company for 2016 (12 Marks)

(b) Prepare an income statement for Superior Manufacturing Company for 2016 (8 Marks)