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	$	4,570
Direct labor	$	59,000
Manufacturing overhead applied to work in process	$	87,300
Underapplied overhead	$	4,000

Inventories	Beginning		Ending
Raw materials	$	11,900	$	18,300
Work in process	$	55,400	$	68,900
Finished goods	$	34,100	$	42,800

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

Schedule of Cost of goods manufactured

Raw material, beginning	11,900
Raw material purchase	31,000
Raw material available for use	42,900
Raw material, ending	-18,300
Direct material used	24,600
Direct labor	59,000
Manufacturing overhead applied	87,300
Total manufacturing cost	170,900
Work in process, beginning	55,400
Work in process, ending	-68,900
Cost of goods manufactured	$157,400

Cost of goods manufactured = $157,400

Schedule of Cost of goods sold

Finished goods, beginning	34,100
Cost of goods manufactured	157,400
Finished goods available for sale	191,500
Finished goods, ending	-42,800
Unadjusted cost of goods sold	148,700
Under applied overhead	4,000
Adjusted cost of goods sold	$152,700

Cost of goods sold = $152,700

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