Question

Primare Corporation has provided the following data concerning last month's manufacturing operations. Purchases of raw materials Indirect materials included in manufacturing overhead Direct labor Manufacturing overhead applied to work in process Underapplied overhead $ 30,000 $ 5,000 $ 58,000 $ 87,000 $ 4,000 Inventories Raw materials Work in process Finished goods Beginning Ending $ 12,000 $18,000 $ 56,000 $ 65,000 $ 35,000 $ 42,000 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

Primare corporation Schedule of cost of Goods Manufactured Direct Materials: Beginning raw materials inventory & 12,000 Addo purchases of raw materials __ $ 30,000 Total raw materials available $42,000 less Ending raw materials inventory & 10,000 Raw materials used in production $24,000 Øndirect materials in eluded in manufacturing over head Direct labor $58,000 Manufacturing overhead applied to work in process $ 87,000 Total manufacturing costs $164,000 $ 56,000 Add: Beginning work in process inventory $ 220,000 $ 65,000 lesse Ending work in process inventory $ 155,000 Cost of goods manufactured $5,000 $19,000

(2) Primare corporation Schedule of cost of Goods sold I Beginning finished goods inventory $ 35,000 Add: cost of goods manufactured $ 155,000 - Cost of goods available for sale $190,000 lessi Ending finished goods inventory $ 42,000 Unadjusted cost of goods sold $ 148,000 Add: Underapplied overhead $ 4,000 $152,000 Adjusted cost of goods sold