Primare Corporation has provided the following data concerning last month\'s man

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 $5,000
Direct labor $58,000
Manufacturing overhead applied to work in process $87,000
Underapplied overhead $4,000

Inventories Beginning Ending
Raw materials $12,000 $18,000
Work in process $56,000 $65,000
Finished goods $35,000 $42,000

Requirement 1:
Calculate the cost of goods manufactured for the month.
Requirement 2:
Calculate the cost of goods sold for the month.

Explanation / Answer

DM used = DM Beg + DM Purch – DM End = 12000 + 30000 – 18000 = 24000 COGM = 24000+56000+58000+87000-65000 = 160,000 COGS = 35000+160000-42000 = 9000

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