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 $30,000 $ 4,760 $59,500 $88,300 $ 4,150 Inventories Raw materials Work in process Finished goods Beginning $ 11,700 $ 54,700 $ 35,000 Ending $ 18,000 $ 68,700 $ 42,300 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

1	Primare Corporation
	Schedule of Cost of Goods Manufactured
	Direct Materials:
	Beginning raw material inventory	11,700
	Add: Purchase of raw material	30,000
	Total raw material available	41,700
	Less Ending raw material	18,000
	Raw materail used in production	23,700
	Less: Indirect materials included in manufacturing overhead	4,760	18,940
	Direct Labour		59,500
	Manufacturing overhead applied to work in process		88,300
	Total manufacturing cost		166,740
	Add: beginning inventory		54,700
			221,440
	Less: Ending WIP Inventory		68,700
	Cost of Goods manufactured		152,740
2	Primare Corporation
	Schedule of Cost of Goods Sold
	Beginning Finished goods inventory	35,000
	Add: Cost of goods manufactured	152,740
	Cost of goods available for sale	187,740
	Less: Ending Finished goods inventory	42,300
	Unadjusted cost of goods sold	145,440
	Add: Underapplied overhead	4,150
	Adjusted cost of goods sold	149,590