Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 31,000 Indirect materials included in manufacturing overhead $ 4,510 Direct labor $ 58,800 Manufacturing overhead applied to work in process $ 87,100 Underapplied overhead $ 4,040 Inventories Beginning Ending Raw materials $ 11,300 $ 19,100 Work in process $ 54,500 $ 67,800 Finished goods $ 33,500 $ 43,400 Required: 1. Prepare a schedule of cost of goods manufactured for the month. 2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Answer 1

SOLUTION

1. Schedule of cost of goods manufactured-

Particulars	Amount ($)	Amount ($)
Direct materials:
Raw material inventory, Beginning	11,300
Add: Purchase of raw materials	31,000
Total raw materials available	42,300
Deduct: Raw material inventory, Ending	(19,100)
Raw materials used in production	23,200
Less: Indirect materials included in manufacturing overhead	(4,510)	18,690
Direct labor		58,800
Manufacturing overhead applied to work in process		87,100
Total manufacturing cost		164,590
Add: Beginning work in process inventory		54,500
		219,090
Less: Ending work in process inventory		(67,800)
Cost of goods manufactured		151,290

2. Schedule of cost of goods sold

Particulars	Amount ($)
Finished goods inventory, beginning	33,500
Add: Cost of goods manufactured	151,290
Goods available for sale	184,790
Deduct: Finished goods inventory, ending	(43,400)
Unadjusted cost of goods sold	141,390
Add: Underapplied overhead	4,040
Adjusted cost of goods sold	145,430