Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials used in production $ 4,870 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,900 Underapplied overhead $ 4,170 Inventories Beginning Ending Raw materials $ 10,100 $ 19,900 Work in process $ 55,800 $ 68,200 Finished goods $ 34,600 $ 42,300 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 for the month

Direct Materials ($ 22,200 - $ 4,870) $ 17,330

Direct labor $ 58,000

Indirect materials $ 4,870

Manufacturing overhead $ 87,900

Add Opening Work in process Inventory $ 55,800

Less Closing Work in process Inventory ($ 68,200)

Cost of goods manufactured $155,700

2. schedule of cost of goods sold for the month

Cost of goods manufactured $155,700

Add :

Opening Finished goods Inventory $ 34,600

Under-applied overhead $ 4,170

Less :

Closing Finished goods Inventory ($ 42,300)

Cost of goods sold $152,170

Step-by-step explanation:

Determination of Total Raw Materials used in production

Raw Materials T - Account

Debit :

Beginning Balance $ 10,100

Purchases $ 32,000

Totals $42,100

Credit :

Closing Balance $ 19,900

Work In Progress (Balancing figure) $ 22,200

Totals $ 42,100