Question

Primare Corporation has provided the following data concerning last month’s manufacturing operations.

Purchases of raw materials $30,000
Indirect materials used in production $4,520
Direct labor $58,100
Manufacturing overhead applied to work in process $87,400
Underapplied overhead $4,190

Inventories Beginning Ending
Raw materials $11,300 $19,200
Work in process $54,700 $69,900
Finished goods $33,600 $43,600

Required:
a. Prepare a schedule of cost of goods manufactured for the month.
b. Prepare a schedule of cost of goods sold for the month.

Answer 1

Answer:

Results are below.

Explanation:

To calculate the cost of goods manufactured, we need to use the following formula:

Cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

Cost of goods manufactured= 54,700 + (11,300 + 30,000 - 19,200) + 58,100 + 87,400 - 69,900

Cost of goods manufactured= $152,400

Now, the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 33,600 + 152,400 - 43,600

COGS= $142,400