Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials used in production $ 4,690 Direct labor $ 59,200 Manufacturing overhead applied to work in process $ 87,000 Underapplied overhead $ 4,170 Inventories Beginning Ending Raw materials $ 10,800 $ 19,800 Work in process $ 55,200 $ 66,800 Finished goods $ 35,000 $ 42,800

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.

Schedule of Cost of Goods Manufactured
Raw materials inventory beginning	10,800
Add: Raw Material purchased	32,000
Total raw materials available	42,800
Less: Raw materials inventory ending	-19,800
Less: Indirect materials	-4,690
Raw material used in production		18,310
Direct labor		59,200
Manufacturing Overheads		87,000
Total Manufacturing Costs		164,510
Add: Work in process inventory, beginning		55,200
Total cost of work in process		219,710
Less:Work in process inventory ending		-66,800
Cost of goods manufactured		$152,910

2.

Schedule of Cost of Goods Sold
Finished goods inventory, beginning	35,000
Cost of goods manufactured	152,910
Cost of goods available for sale	187,910
Finished goods inventory, Ending	-42,800
Unadjusted Cost of goods sold	145,110
Under applied manufacturing overhead	4,170
Adjusted Cost of goods sold	$149,280