Question

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Exercise 3-14 Production cost flow and measurement; journal entries LO P1, P2, P3, P4 Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories: Raw materials inventory Work in process inventory-Weaving Work in process inventory-Sewing Finished goods inventory Beginning Inventory $ 182,000 370,000 585,000 1,406,000 Ending Inventory $285,000 450,000 760,000 1,496,000 The following additional information describes the company's manufacturing activities for June $ 580,000 3,210,000 178,000 $ 252,000 96,000 194,000 Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other factory overhead cost (Other Accounts credited) Materials used Direct-Weaving Direct-Sewing Indirect Labor used Direct-Weaving Direct-Sewing Indirect Overhead rates as a percent of direct labor Weaving Sewing Sales (on credit) $1,350,000 415,000 1,625,000 80% 155% $4,650,000 1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (c) cost of goods sold. (a) From weaving to sewing (b) From sewing to finished goods (c) Cost of goods sold

Answer 1

1a. Cost of Goods Manufactured in Weaving Department Materials used Direct labor Manufacturing overhead Total manufacturing costs Add Beginning Work in Process Subtotal Less: Ending Work in Process Cost of Goods manufactured $ $ $ $ $ $ $ $ 2,52,000 13,50,000 10,80,000 ($13,50,000 * 80%) 26,82,000 3,70,000 30,52,000 4,50,000 26,02,000 - 1b $ $ - Materials used Direct labor Manufacturing overhead Total manufacturing costs Add Beginning Work in Process Subtotal Less: Ending Work in Process Cost of Goods manufactured $ $ $ $ $ 96,000 4,15,000 6,43,250 ($415,000 * 155%) 11,54,250 5,85,000 17,39,250 7,60,000 9,79,250

1c Cost of Goods manufactured Add: Beginning Finished Goods Inventory Goods Available for Sale Less: Ending Finished Goods Inventory Cost of Goods Sold $ $ $ $ $ 9,79,250 14,06,000 23,85,250 14,96,000 8,89,250

No. Credit Date General Journal Jun-30 Work in Process - Sewing Work-in Process - Weaving Debit $ 26,02,000 $ 26,02,000 $ 9,79,250 Jun-30 Finished Goods Work-in Process - Sewing $ 9,79,250 $ 46,50,000 Jun-30 Accounts Receivable Sales $ 46,50,000 4 $ 8,89,250 Jun-30 Cost of Goods Sold Finished Goods $ 8,89,250