Tuesday, 31 July 2012

Parmitan Corporation has provided the following data concerning last month’s manufacturing

Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO6]
Parmitan Corporation has provided the following data concerning last month’s manufacturing operations.

   
  Purchases of raw materials $ 53,000  
  Indirect materials included in manufacturing overhead $ 8,000  
  Direct labor $ 62,000  
  Manufacturing overhead applied to work in process $ 41,000  
  Underapplied overhead $ 8,000  


  Inventories Beginning Ending
  Raw materials $ 24,000   $ 6,000  
  Work in process $ 41,000   $ 38,000  
  Finished goods $ 86,000   $ 93,000  


Required:
1. Prepare a schedule of cost of goods manufactured for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)
   
Schedule of Cost of Goods Manufactured
  Direct materials:
     Raw materials inventory, beginning correct $ 24,000 correct  
     Add correct : Purchases of raw materials correct 53,000 correct  
  
     Total raw materials available correct 77,000 correct  
     Deduct correct : Raw materials inventory, ending correct 6,000 correct  
  
     Raw materials used in production 71,000 correct  
     Deduct correct : Indirect materials included in manufacturing overhead correct 8,000 correct   $ 63,000 correct  
  Direct labor correct 62,000 correct  
  Manufacturing overhead applied to work in process inventory correct 41,000 correct  
  
  Total manufacturing cost 166,000 correct  
  Add correct : Beginning work in process inventory correct 41,000 correct  
  
207,000 correct  
  Deduct correct : Ending work in process inventory correct 38,000 correct  
  
  Cost of goods manufactured $ 169,000 correct  
  


   
2.
Prepare a schedule of cost of goods sold for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)
   
Schedule of Cost of Goods Sold
  Finished goods inventory, beginning correct $ 86,000 correct  
  Add correct : Cost of goods manufactured correct 169,000 correct  
  
  Cost of goods available for sale correct 255,000 correct  
  Deduct correct : Finished goods inventory, ending correct 93,000 correct  
  
  Unadjusted cost of goods sold correct 162,000 correct  
  Add correct : Underapplied overhead correct 8,000 correct  
  
  Adjusted cost of goods sold $ 170,000 correct