Question

Parmitan corporation has provided the following data concerning last month’s manufacturing operations.

Purchases of raw materials______________________________ $53,000

Indirect materials included in manufacturing overhead________ 8,000

Direct labor__________________________________________ 62,000

Manufacturing overhead applied to work in process__________ 41,000

Underapplied overhead_________________________________ 8,000

Ending raw materials

            Inventory = $25,000

       Ending work in process

            Inventory = $43,000

INVENTORIES Beginning of year Ending of year

Raw materials__________________________________$24,000 $ 6,000

work in process ___________________________ 41,000 38,000

Finished goods________________________________ 66,000 93,000

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.

Answer 1

1)								2)
Schedule of cost of goods manufactured								COGS statementfor the month
Direct Materials used
Raw material inventory - beginning					24000			Finished Goods inventory,beginning					66000
Add: Purchase of Raw material					53000			add: cost of goods manufactured					169000
Raw material availaable for use					77000			Cost of goods available for sale					235000
Less: Raw material inventory-ending					6000			Less: Finished Goods Inventory					93000
raw material used in production					71000			Unadjusted cost of goods sold					142000
Less: indirect material used					8000			add: Underapplied overhead					8000
Direct material used					63000			Adjusted cost of goods sold					150000
Direct Labour incurred					62000
Manufacturing overhead					41000
Total manufacturing costs added this year					166000
Beginning WIP					41000
Total WIP					207000
Less: WIP - ending					38000
Cost of goods manufactured					169000