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	$	4,550
Direct labor	$	58,600
Manufacturing overhead applied to work in process	$	88,100
Underapplied overhead	$	4,150

Inventories	Beginning		Ending
Raw materials	$	11,900	$	18,800
Work in process	$	54,600	$	68,100
Finished goods	$	33,300	$	43,000

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

1)
Primare Corporation
Schedule of Cost of Goods Manufactured
Direct Materials :
Beginning Raw materials Inventory	$ 11,900
Add: Purchases of Raw Materials	$ 31,000
Total Raw Materials Available	$ 42,900
Less: Ending Raw Materials Inventory	($18,800)
Raw Materials used in production	$ 24,100
Less: Indirect Materials included in Manufacturing Overhead	($4,550)	$ 19,550
Direct Labor		$ 58,600
Manufacturing Overhead applied to Work in process		$ 88,100
Total Manufacturing Costs		$ 166,250
Add: Beginning Work in process Inventory		$ 54,600
		$ 220,850
Less: Ending Work in process Inventory		($68,100)
Cost of Goods Manufactured		$ 152,750

2)
Primare Corporation
Schedule of Cost of Goods Sold
Beginning Finished goods Inventory	$ 33,300
Add: Cost of goods manufactured (see required 1 )	$ 152,750
Cost of goods available for sale	$ 186,050
Less: Ending Finished goods Inventory	($43,000)
Unadjusted Cost of goods sold	$ 143,050
Add: Underapplied Overhead	$ 4,150
Adjusted Cost of goods sold	$ 147,200