Question

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

Purchases of raw materials	$	31,000
Indirect materials used in production	$	4,520
Direct labor	$	58,100
Manufacturing overhead applied to work in process	$	87,900
Underapplied overhead	$	4,120

Inventories	Beginning		Ending
Raw materials	$	11,500	$	18,900
Work in process	$	55,100	$	68,500
Finished goods	$	34,300	$	43,500

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

1	Primare Corporation
	SCHEDULE OF COST OF GOODS MANUFACTURED
		$	$
	Direct materials:
	Beginning Raw materials inventory	11,500.00
	Add: Raw materials purchases	31,000.00
	Raw materials available for use	42,500.00
	Less: Ending Raw materials inventory	(18,900.00)
	Raw materials used in production	23,600.00
	Less: Indirect Materials included in manufacturing overhead	(4,520.00)	19,080.00
	Direct labor		58,100.00
	Manufacturing Overhead applied to work in process		87,900.00
	Total manufacturing costs		165,080.00
	Add: Beginning Work in process inventory		55,100.00
	Total cost of work in process		220,180.00
	Less: Ending Work in process inventory		(68,500.00)
	Cost of goods manufactured		151,680.00
	Primare Corporation
2	Schedule of cost of goods sold for the year
		$
	Beginning Finished Goods	34,300.00
	Add: Cost of goods manufactured	151,680.00
	Cost of goods available for sale	185,980.00
	Less: Ending Finished Goods	(43,500.00)
	Unadjusted Cost of goods sold	142,480.00
	Add: Under applied overhead	4,120.00
	Adjusted Cost of goods sold	146,600.00