Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations.

Purchases of raw materials	$	31,000
Indirect materials used in production	$	4,940
Direct labor	$	59,400
Manufacturing overhead applied to work in process	$	88,000
Underapplied overhead	$	4,190

Inventories	Beginning		Ending
Raw materials	$	10,400	$	18,900
Work in process	$	54,200	$	69,800
Finished goods	$	34,000	$	43,600

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

Direct materials
Raw materials, beginning	$10,400
Add: Purchase of raw materials	$31,000
Raw materials available for use	$41,400
Less: Raw materials, Ending	($18,900)
Raw materials used in production	$22,500
Less: Indirect materials included in manufacturing overhead	($4,940)	$17,560
Direct labor		$59,400
Manufacturing overhead		$88,000
Total manufacturing costs		$164,960
Add: Work in process, beginning		$54,200
Total cost of work in process		$219,160
Less: Work in process, Ending		($69,800)
Cost of goods manufactured		$149,360

Schedule of cost of goods sold

Beginning finished goods	$34,000
Add: Cost of goods manufactured	$149,360
Cost of goods available for sale	$183,360
Less: Ending finished goods	($43,600)
Unadjusted cost of goods sold	$139,760
Add: Underapplied Overhead	$4,190
Adjusted cost of goods sold	$143,950