Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials$32,000 Indirect materials included in manufacturing overhead$4,680 Direct labor$59,300 Manufacturing overhead applied to work in process$87,100 Underapplied overhead$4,100 Raw materials$11,200$20,000 Work in process$56,000$68,500 Finished goods$34,900$43,700 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 and Explanation:

1. The Preparation of schedule of cost of goods manufactured for the month is prepared below:-

Primare Corporation

Schedule of Cost of Goods manufactured

Particulars                                                             Amount

Direct Materials:

Beginning Raw Material                      $11,200

Add: Raw Material purchases

during the month                                 $32,000

Total Raw Material available              $43,200

Less: Ending Raw material                   $20,000

Raw Material used in production         $23,200

Less: Indirect Material included in

manufacturing Overhead                       $4,680  $18,520

Add: Direct labor                                                   $59,300

Add: Manufacturing overhead

applied to work in process                                    $87,100

Total Manufacturing Costs                                   $164,920

Add: Beginning Work In Process                           $56,000

Less:  Ending Work in Process                               $68,500

Cost of Goods manufactured                                $152,420

2. The Preparation of schedule of cost of goods sold for the month is prepared below:-

Primare Corporation

Schedule of Cost of Goods Sold

Particulars                                                             Amount

Beginning finished Goods Inventory                    $34,900

Add: Cost of Goods Manufactured                       $152,420

Goods available for sale                                        $187,320

Less: Finished Goods Inventory, Ending               $43,700

Unadjusted cost of goods sold                             $143,620

Add: Under-applied Overhead                               $4,100

Cost of Goods Sold adjusted                                 $147,720

(Under-applied overhead refers that there was less overhead applied that is Actual overheads are more than the overhead applied, thus adding to the cost of the goods sold)