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	$	4,860
Direct labor	$	58,900
Manufacturing overhead applied to work in process	$	87,800
Underapplied overhead	$	4,100

Inventories	Beginning		Ending
Raw materials	$	11,800	$	19,300
Work in process	$	55,600	$	69,200
Finished goods	$	33,600	$	42,700

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

Schedule of Cost of goods manufactured:
Beginning inventory of WIP			55,600
Add: Current cost of manufacture
Beginning Inventory of RM	11,800
Add: Purchase		31,000
Total material aavailable	49800
Less: Ending inventory of RM	19,300
Material used in production	30,500
Less: Indirect material used	4,860
Direct material used			25,640
Direct labour cost			58,900
Manufacturing Overheads applied	87,800
Total current cost of manufacture		1,72,340
Total cost of goods manufacturing		2,27,940
Less: Ending inventory of WIP			69,200
Cost of goods manufactured			1,58,740
Schedule of Cost of goods sold:
Beginning inventory of FG		33,600
Add: Cost of goods manufactured	1,58,740
Total cost of goods available for sale	1,92,340
Less: Ending inventory of FG		42,700
Unadjusted cost of goods sold		1,49,640
Add: Under-applied Overheads		4,100
Adjusted cost of goods sold		1,53,740