Exercise 3-3 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3]

Primare Corporation has provided the following data concerning last months manufacturing operations.

Purchases of raw materials	$ 30,000
Indirect materials used in production	$ 4,610
Direct labor	$ 58,100
Manufacturing overhead applied to work in process	$ 87,700
Underapplied overhead	$ 4,110

Inventories	Beginning	Ending
Raw materials	$ 11,800	$ 19,500
Work in process	$ 56,000	$ 65,200
Finished goods	$ 33,500	$ 42,100

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.

Prepare a schedule of cost of goods manufactured for the month.

Primare Corporation
Schedule of Cost of Goods Manufactured
Beginning work in process inventory			$56,000
Direct materials:
Beginning raw materials inventory	$11,800
Add: Purchases of raw materials	30,000
Total raw materials available	41,800
Less: Ending raw materials inventory	19,500
Raw materials used in production	22,300
Less: Indirect materials used in production	4,610
Direct materials used in production		$17,690
Direct labor		58,100
Manufacturing overhead		87,700
Total manufacturing costs added to production			163,490
Total manufacturing costs to account for			219,490
Less: Ending work in process inventory			65,200
Cost of goods manufactured			$154,290

Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.

Primare Corporation
Schedule of Cost of Goods Sold
Beginning finished goods inventory	$33,500
Add: Cost of goods manufactured	154,290
Cost of goods available for sale	187,790
Less: Ending finished goods inventory	42,100
Unadjusted cost of goods sold	145,690
Add: Underapplied overhead
Adjusted cost of goods sold