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 $ 4,590 Direct labor $ 58,900 Manufacturing overhead applied to work in process $ 88,100 Underapplied overhead $ 4,030 Inventories Beginning Ending Raw materials $ 11,100 $ 19,800 Work in process $ 54,300 $ 68,400 Finished goods $ 34,300 $ 42,700 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

Answer:

COGM    154,200

COGS                                  145,800

underapplied MO                   4,030

Adjusted COGS                   149,830

Explanation:

Materials used in production

beginning   11, 100

purchases 30,000

available     41, 100

ending       (19,800)

used           21,300

Cost added

Materials   21, 300

Labor        58,900

Overhead 88, 100

Total        168,300

Beginning WIP     54,300

Cost added         168,300

Ending WIP         (68,400)

COGM                154,200

Cost of Goods sold:

As the overhead was underapplied, the applied overhead is lower than the actual cost. So the company's needs to increase the overhead in the inventory thus, increase the COGS for the underapplied amount.

Finished goods beginning   34,300

COGM                                  154,200

Finished goods ending       (42,700)

COGS                                  145,800

underapplied MO                   4,030

Adjusted COGS                   149,830

Answer 2

1. A Schedule of Cost of Goods Manufactured for the month:

Beginning work in process        $ 54,300

Raw materials                                  16,710

Direct labor                                   58,900

Overhead applied                         88,100

Total costs                                 $218,010

Ending inventory                      $ 68,400

Cost of goods manufactured $149,610

2. A Schedule of Cost of Goods Sold for the month:

Beginning finished goods inventory   $ 34,300

Cost of goods manufactured              $149,610

Under-applied overhead                          4,030

Less Ending finished goods inventory (42,700)

Adjusted Cost of goods sold           $145,240

Data:

Purchases of raw materials $ 30,000

Indirect materials included in manufacturing overhead $ 4,590

Direct labor $ 58,900

Manufacturing overhead applied to work in process $ 88,100

Under-applied overhead $ 4,030

Inventories            Beginning    Ending

Raw materials        $ 11,100    $ 19,800

Work in process $ 54,300    $ 68,400

Finished goods  $ 34,300    $ 42,700

Raw materials

Account Titles             Debit      Credit

Beginning inventory $11,100

Purchase                   30,000

Manufacturing overhead         $4,590

Work in process                       $16,710

Ending inventory                    $19,800

Work in process

Account Titles             Debit      Credit

Beginning inventory $ 54,300

Raw materials                16,710

Direct labor                 58,900

Overhead applied       88,100

Finished goods inventory      $149,610

Ending inventory                   $ 68,400

Finished Goods

Account Titles             Debit      Credit

Beginning inventory $ 34,300

Work in process        $149,610

Cost of goods sold                  $141,210

Ending inventory                    $ 42,700

Cost of goods sold

Finished goods inventory         $141,210

Under-applied overhead              4,030

Adjusted cost of goods sold $145,240

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