Question

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

Purchases of raw materials	$	32,000
Indirect materials included in manufacturing overhead	$	4,680
Direct labor	$	59,000
Manufacturing overhead applied to work in process	$	88,000
Underapplied overhead	$	4,190

Inventories	Beginning		Ending
Raw materials	$	11,000	$	18,400
Work in process	$	55,700	$	68,700
Finished goods	$	33,800	$	43,400

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	11,000.00
	Add: Raw materials purchases	32,000.00
	Raw materials available for use	43,000.00
	Less: Ending Raw materials inventory	(18,400.00)
	Raw materials used in production	24,600.00
	Less: Indirect Materials included in manufacturing overhead	(4,680.00)	19,920.00
	Direct labor		59,000.00
	Manufacturing Overhead applied to work in process		88,000.00
	Total manufacturing costs		166,920.00
	Add: Beginning Work in process inventory		55,700.00
	Total cost of work in process		222,620.00
	Less: Ending Work in process inventory		(68,700.00)
	Cost of goods manufactured		153,920.00
2	Computation cost of goods sold for the year
		$
	Beginning Finished Goods	33,800.00
	Add: Cost of goods manufactured	153,920.00
	Cost of goods available for sale	187,720.00
	Less: Ending Finished Goods	(43,400.00)
	Unadjusted Cost of goods sold	144,320.00
	Add: Under applied overhead	4,190.00
	Adjusted Cost of goods sold	148,510.00