Question

Primare Corporation has provided the following data concerning last month's manufacturing operations. Purchases of raw materials Indirect materials used in production Direct labor Manufacturing overhead applied to work in process Underapplied overhead $31,000 $ 4,770 $58,400 $87,000 $ 4,080 Inventories Raw materials Work in process Finished goods Beginning $ 10,600 $ 54,700 $ 33,200 Ending $ 18,800 $ 65,300 $ 43,300 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

Requirement 1

Primare Corporation

Statement of Cost of Goods Manufactured

Particulars	Amount	Amount	Amount
Beginning Work in Process Inventory			54,700
Direct Materials:
Beginning Raw Materials Inventory	10,600
Add: Purchases of Raw Materials	31,000
Total Raw Materials available for use	41,600
Less: Ending Raw Materials Inventory	18,800
Raw Material Used in Production	22,800
Less: Indirect Materials used in Production	4,770
Direct Materials Used in Production		18,030
Direct Labour		58,400
Manufacturing Overhead Applied		87,000
Total Manufacturing Costs added to Production			163,430
Total Manufacturing Costs to Accounts for			218,130
Less: Ending Work in Process Inventory			65,300
Cost of Goods Manufactured			152,830

Notes

Total Manufacturing Costs added to Production = Direct Materials Used + Direct Labour + Manufacturing Overhead Applied

Total Manufacturing Costs to Account for = Total Manufacturing Costs applied to Production + Beginning Work in Process Inventory

Requirement 2

Primare Corporation

Statement of Cost of Goods Sold

Particulars	Amount
Beginning Finished Goods Inventory	33,200
Add: Cost of Goods Manufactured	152,830
Cost of Goods available for Sale	186,030
Less: Ending Finished Goods Inventory	43,300
Unadjusted Cost of Goods Sold	142,730
Add: Underapplied Overhead	4,080
Adjusted Cost of Goods Sold	146,810