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 $ 4,520 Direct labor $ 58,600 Manufacturing overhead applied to work in process $ 87,300 Underapplied overhead $ 4,010 Inventories Beginning Ending Raw materials $ 11,300 $ 18,400 Work in process $ 54,800 $ 68,600 Finished goods $ 34,300 $ 42,200 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	Primare Corporation
	Schedule of Cost of Goods Manufactured
	Direct Materials:
	Beginning raw material inventory	11,300
	Add: Purchase of raw material	32,000
	Total raw material available	43,300
	Less Ending raw material	18,400
	Raw materail used in production	24,900
	Less: Indirect materials included in manufacturing overhead	4,520	20,380
	Direct Labour		58,600
	Manufacturing overhead applied to work in process		87,300
	Total manufacturing cost		166,280
	Add: beginning inventory		54,800
			221,080
	Less: Ending WIP Inventory		68,600
	Cost of Goods manufactured		152,480
2	Primare Corporation
	Schedule of Cost of Goods Sold
	Beginning Finished goods inventory	34300
	Add: Cost of goods manufactured	152,480
	Cost of goods available for sale	186780
	Less: Ending Finished goods inventory	42200
	Un adjusted cost of goods sold	144580
	Add: Under applied overhead	4010
	Adjusted cost of goods sold	148590
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