Question

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

Purchases of raw materials	$	30,000
Indirect materials included in manufacturing overhead	$	4,710
Direct labor	$	58,200
Manufacturing overhead applied to work in process	$	88,700
Underapplied overhead	$	4,150

Inventories	Beginning		Ending
Raw materials	$	11,800	$	19,100
Work in process	$	54,100	$	65,800
Finished goods	$	33,700	$	42,500

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

Solution

Primare Corporation
Schedule of Cost of Goods manufactured
Direct Material
Direct Material Inventory Beginning	$ 11,800
Direct material Purchased	$ 30,000
Direct material available for use	$ 41,800
Less: Indirect Material used	$ 4,710
Less: Direct material Inventory Ending	$ 19,100
Direct Material Used		$ 17,990
Direct labor		$ 58,200
Manufacturing Overheads applied		$ 88,700
Total manufacturing Cost		$ 164,890
Add: Beginning Work in Progress		$ 54,100
Total Cost of Work in Progress		$ 218,990
Less: Ending Work in progress		$ 65,800
Cost of Goods Manufactured		$ 153,190

.

Primare Corporation
Schedule of cost of goods sold
Beginning Finished Goods Inventory		$       33,700.00
Add: Cost of goods manufactured		$     153,190.00
Goods Available for sale		$     186,890.00
Less :Ending Finished goods Inventory		$       42,500.00
Unadjusted Cost of Goods Sold		$     144,390.00
Underapplied Manufacturing overheads		$         4,150.00
Adjusted cost of goods sold		$     148,540.00