Question

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

Purchases of raw materials	$	31,000
Indirect materials included in manufacturing overhead	$	4,710
Direct labor	$	59,000
Manufacturing overhead applied to work in process	$	88,400
Underapplied overhead	$	4,100

Inventories	Beginning		Ending
Raw materials	$	11,700	$	19,800
Work in process	$	55,000	$	65,000
Finished goods	$	34,500	$	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.

Answer 1

1.

Primare Corporation
Cost of Goods Manufactured Schedule
Direct materials:
Raw materials inventory beginning	11,700
Add: Material purchased	31,000
Total raw materials available	42,700
Less: Raw materials inventory ending	-19,800
Less: Indirect materials	-4,710
Raw material used in production		18,190
Direct labor		59,000
Manufacturing Overheads		88,400
Total Manufacturing Costs		165,590
Add: Work in process inventory, beginning		55,000
Total cost of work in process		220,590
Less:Work in process inventory ending		-65,000
Cost of goods manufactured		$155,590

2.

Primare Corporation
Schedule of Cost of Goods Sold
Finished goods inventory, beginning	34,500
Cost of goods manufactured	155,590
Cost of goods available for sale	190,090
Finished goods inventory, Ending	-43,700
Unadjusted Cost of goods sold	146,390
Under applied manufacturing overhead	4,100
Adjusted Cost of goods sold	$150,490

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