Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials included in manufacturing overhead $ 4,690 Direct labor $ 58,100 Manufacturing overhead applied to work in process $ 88,500 Underapplied overhead $ 4,180 Inventories Beginning Ending Raw materials $ 10,300 $ 19,800 Work in process $ 55,100 $ 67,100 Finished goods $ 34,200 $ 43,900

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 inventory, beginning	10300
Add: Purchases of raw materials	32000
Total raw materials available	42300
Deduct: Raw materials inventory, ending	19800
Raw materials used in production	22500
Less: Indirect materials included in manufacturing overhead	4690	17810
Direct labor		58100
Manufacturing overhead applied to work in process inventory		88500
Total manufacturing costs		164410
Add: Beginning work in process inventory		55100
		219510
Deduct: Ending work in process inventory		67100
Cost of goods manufactured		152410
2
Schedule of Cost of Goods Sold
Finished goods inventory, beginning	34200
Add: Cost of goods manufactured	152410
Cost of goods available for sale	186610
Deduct: Finished goods inventory, ending	43900
Unadjusted cost of goods sold	142710
Add: Underapplied overhead	4180
Adjusted cost of goods sold	146890