Question

Exercise 3-3 Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3]

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	$	4,860
Direct labor	$	58,800
Manufacturing overhead applied to work in process	$	88,600
Underapplied overhead	$	4,070

Inventories	Beginning		Ending
Raw materials	$	10,700	$	19,400
Work in process	$	55,500	$	66,300
Finished goods	$	34,300	$	43,500

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.

Raw material, beginning	10,700
Purchase of raw material	31,000
Total raw material available	41,700
Raw material, ending	-19,400
Direct material used	22,300
Direct labor	58,800
Manufacturing overhead applied	88,600
Total manufacturing cost	169,700
Work in process, beginning	55,500
Work in process, ending	-66,300
Cost of goods manufactured	$158,900

2.

Finished goods, beginning	34,300
Cost of goods manufactured	158,900
Cost of goods available for sale	193,200
Finished goods, ending	-43,500
Unadjusted cost of goods sold	149,700
Under applied overhead	4,070
Adjusted cost of goods sold	$153,770

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