# Primare corporation schedule of cost of goods sold

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Chapter AM1 / Exercise 18
Technology for Success and Illustrated Series Microsoft Office 365 & Office 2019
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Primare Corporation Schedule of Cost of Goods Sold Finished goods inventory, beginning \$35,000 Add: Cost of goods manufactured 155,000 Goods available for sale \$190,000 Less: Finished goods inventory, ending (42,000) Unadjusted cost of goods sold \$148,000 Add: Underapplied overhead 4,000 Adjusted cost of goods sold \$152,000
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Chapter AM1 / Exercise 18
Technology for Success and Illustrated Series Microsoft Office 365 & Office 2019
Beskeen/Parson
Expert Verified
In-Class Exercise #6: Osborn Manufacturing uses a predetermined overhead rate of \$18.20 per direct labor-hour. This predetermined rate was based on a cost formula that estimates \$218,400 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of \$215,000 and 11,500 total direct labor-hours during the period. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. 2. Assuming that the entire amount of the underapplied or overapplied overhead is closed out to cost of goods sold, what would be the effect of the underapplied or overapplied overhead on the company's gross margin for the period?
In-Class Exercise #7: Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead costs to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur \$4,800,000 in manufacturing overhead cost at an activity level of 240,000 machine-hours. The company spent the entire month of January working on a large order for 16,000 custom made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, \$325,000. b.Raw materials requisitioned for production, \$290,000 (80% direct materials and 20% indirect materials). c. Labor cost incurred in the factory, \$180,000 (one-third direct labor and two- thirds indirect labor). d.Depreciation recorded on factory equipment, \$75,000. e. Other manufacturing overhead costs incurred, \$62,000 (credit Accounts Payable). f. Manufacturing overhead cost was applied to production on the basis of 15,000 machine-hours actually worked during the month. g. The completed job was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.) Required: