Question

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

Purchases of raw materials	$	30,000
Indirect materials included in manufacturing overhead	$	4,700
Direct labor	$	60,000
Manufacturing overhead applied to work in process	$	88,800
Underapplied overhead	$	4,130

Inventories	Beginning		Ending
Raw materials	$	11,900	$	18,700
Work in process	$	55,600	$	65,100
Finished goods	$	34,700	$	43,200

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

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Primare Corporation
Schedules of cost of goods manufactured
	Amount $
Direct Materials
Beginning materials Inventory	11,900.00
Cost of material purchased	30,000.00
Cost of material available	41,900.00
Less: Ending materials Inventory	18,700.00
Total Material used	23,200.00
Less: Indirect Material used	4,700.00
Direct Material used	18,500.00
Direct Labor	60,000.00
Manufacturing overhead applied	88,800.00
Total Manufacturing costs	167,300.00
Add: Beginning WIP	55,600.00
Total cost of WIP	222,900.00
Less: Ending WIP	65,100.00
Costs of goods manufactured	157,800.00
Schedules of cost of goods sold
Costs of goods manufactured	157,800.00
Add: Beginning Finished goods	34,700.00
Costs of goods available	192,500.00
Less: Ending Finished goods	43,200.00
Costs of goods sold before overhead adjustment	149,300.00
Add: Under applied overhead	4,130.00
Costs of goods sold	153,430.00