Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials used in production $ 4,870 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,900 Underapplied overhead $ 4,170 Inventories Beginning Ending Raw materials $ 10,100 $ 19,900 Work in process $ 55,800 $ 68,200 Finished goods $ 34,600 $ 42,300 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.

1. schedule of cost of goods manufactured for the month

Direct Materials ($ 22,200 - $ 4,870)                  $ 17,330

Direct labor                                                          $ 58,000

Indirect materials                                                   $ 4,870

Manufacturing overhead                                    $ 87,900

Add Opening Work in process Inventory         $ 55,800

Less Closing  Work in process Inventory        ($ 68,200)

Cost of goods manufactured                            $155,700

2. schedule of cost of goods sold for the month

Cost of goods manufactured                            $155,700

Add :

Opening Finished goods Inventory                 $ 34,600

Under-applied overhead                                     $ 4,170

Less :

Closing Finished goods Inventory                 ($ 42,300)

Cost of goods sold                                            $152,170

Explanation:

Determination of Total Raw Materials used in production

Raw Materials T - Account

Debit :

Beginning Balance                                $ 10,100

Purchases                                             $ 32,000

Totals                                                      $42,100

Credit :

Closing  Balance                                  $ 19,900

Work In Progress (Balancing figure)  $ 22,200

Totals                                                    $ 42,100

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.