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	$	4,880
Direct labor	$	59,800
Manufacturing overhead applied to work in process	$	87,000
Underapplied overhead	$	4,100

Inventories	Beginning		Ending
Raw materials	$	11,800	$	18,900
Work in process	$	55,800	$	68,000
Finished goods	$	33,300	$	43,700

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.

	Primare Corporation Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available Raw materials used in production $0 Total manufacturing costs 0 Cost of goods manufactured

	Primare Corporation Schedule of Cost of Goods Sold Beginning finished goods inventory Add: Cost of goods manufactured Cost of goods available for sale Less: Ending finished goods inventory Unadjusted cost of goods sold Add: Underapplied overhead Adjusted cost of goods sold

Answer 1

Solution

Primare Corporation
Schedule of Cost of Goods manufactured
Direct Material
Direct Material Inventory Beginning	$ 11,800
Direct material Purchased	$ 32,000
Direct material available for use	$ 43,800
Less: Indirect Material used	$ 4,880
Less: Direct material Inventory Ending	$ 18,900
Direct Material Used		$ 20,020
Direct labor		$ 59,800
Manufacturing Overheads applied		$ 87,000
Total manufacturing Cost		$ 166,820
Add: Beginning Work in Progress		$ 55,800
Total Cost of Work in Progress		$ 222,620
Less: Ending Work in progress		$ 68,000
Cost of Goods Manufactured		$ 154,620

.

Primare Corporation
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$       33,300.00
Add: Cost of goods manufactured		$     154,620.00
Goods Available for sale		$     187,920.00
Less :Ending Finished goods Inventory		$       43,700.00
Unadjusted Cost of Goods Sold		$     144,220.00
Underapplied Manufacturing overheads		$         4,100.00
Adjusted cost of goods sold		$     148,320.00