The following data from the just completed year are taken from the accounting records of Kenton Company: Sales 2$ 975,000 Direct labor cost 165,000 Raw material purchases Selling expense 24 229,000 24 48,750 Administrative expenses 146,250 Manufacturing overhead applied to work in process $ Actual manufacturing overhead costs 180,000 %24 175,050 Inventories: Ending Beginning 18,000 $ Raw materials 17,500 20,000 s Work in process Finished goods 14,750 9,000 S 11,000 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement.
Answers
Answer:
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Answer:
Find the income statement below:
Explanation:
Direct Material
Beginning raw material 18000
Add: Purchases 229000
Total Raw Material 247000
Deduct: Ending Raw Material 17500
Raw Material Used in Production 7200
Direct Labour 165000
Manufacturing Overhead 180000
Total Manufacturing Cost 352200
Add: Opening WIP 20000
Total WIP 372200
Deduct: Closing WIP (14750)
Cost of Goods Manufactured 357450
Schedule of Cost of Goods Sold:
Opening Finished Goods 9000
Add: Cost of goods maufactured 357450
Cost of goods available for Sale 366450
Deduct: Closing Finished Good Inventory (11000)
Unadjusted Cost of Goods Sold 355450 Deduct Overapplied Overheads(241750-180000) 61750
Adjusted Cost of Goods Sold 293700
Income Statement
Sales Revenue 975000
Less: Cost of Goods Sold 293700
Gross Margin 681300
Selling and Administrative Expenses
-Selling Expense 48750
-Admin Expense 146250
Total Selling and Administrative Expenses 195000
Net Operating Income 486300