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	$	4,960
Direct labor	$	58,700
Manufacturing overhead applied to work in process	$	87,900
Underapplied overhead	$	4,170

Inventories	Beginning		Ending
Raw materials	$	11,400	$	19,900
Work in process	$	55,500	$	67,300
Finished goods	$	33,700	$	42,200

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

1) Schedule of cost of goods manufactured

Direct material used
Beginning raw material	11400
Purchase raw material	32000
Raw material available	43400
Less: Ending raw material	-19900
Raw material used	23500
Less: Indirect material	-4960
Direct material used		18540
Direct labor		58700
Manufacturing overhead		87900
Total manufacturing cost		165140
Beginning work in process		55500
Total cost of work in process		220640
Less: Ending work in process		-67300
Cost of goods manufactured		153340

2) Schedule of cost of goods sold

Beginning finished goods	33700
Cost of goods manufactured	153340
Cost of goods available for sale	187040
Less: Ending finished goods	-42200
Unadjusted cost of goods sold	144840
Add: Under applied overhead	4170
Adjusted cost of goods sold	149010