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	$	4,680
Direct labor	$	59,300
Manufacturing overhead applied to work in process	$	88,400
Underapplied overhead	$	4,150

Inventories	Beginning		Ending
Raw materials	$	10,700	$	19,600
Work in process	$	54,100	$	65,200
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

Solution:

PART-1
Schedules of cost of goods manufactured
Direct Materials
Beginning materials Inventory	10,700
Cost of material purchased	31,000
Cost of material available	41,700
Less: Ending materials Inventory	19600
Total Material used	22,100
Less: Indirect Material used	4,680
Direct Material used	17,420
Direct Labor	59,300
Manufacturing overhead applied	88,400
Total Manufacturing costs	165,120
Add: Beginning WIP	54,100
Total cost of WIP	219,220
Less: Ending WIP	65,200
Costs of goods manufactured	154,020
PART-2
Schedules of cost of goods sold
Costs of goods manufactured	154,020
Add: Beginning Finished goods	34,100
Costs of goods available	188,120
Less: Ending Finished goods	42800
COGS before overhead adjustment	145,320
Add: Under applied overhead	4,150
Costs of goods sold	149,470