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 Inventories Beginning Ending 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)