Question

HOW DO I CALCULATE?

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 $ 186,000 430,000 715,000 1,486,000 Ending Inventory $ 193,000 355,000 945,000 1,406,000 The following additional information describes the company's manufacturing activities for June: $630,000 3,190,000 204,000 $ 306,000 135,000 158,000 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) $1,350,000 390,000 1,725,000 90% 155% $4,800,000 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. 2. Prepare journal entries dated June 30 to record (a) goods transferred from weaving to sewing, (b) goods transferred from sewing to finished goods, (c) sale of finished goods, and (d) cost of goods sold.

Answer 1

Required 1 a) weaving to sewing b) sewing to finished goods c) cost of goods sold ini 2,946,000 3,845,500 3,925,500 goods 1,486,000 A A A Particulars Inventory beginning add Material (direct) add Labor (direct) add Overhead applied (% on direct labor) Net cost weaving Less: Inventory at the end Transferred to sewing Total cost sewing Less: Inventory at the end Transferred to finished goods Less: finished goods at end Cost of goods sold Weaving department Sewing department 430,000 715,000 S 306,000 $ 135,000 1,350,000 $ 390,000 1,215,000 $ 604,500 3,301,000 (355,000) 2,946,000 2,946,000 4,790,500 (945,000) 3,845,500 $ $ $ A AU 3,845,500 (1,406,000) 3,925,500

Required 2 b.journal entries general journal Date debit credit 2,946,000 Jun-30 Work in process inventory - Sewing Work in process inventory - Weaving 2,946,000 3,845,500 Jun-30 Finished goods inventory Work in process inventory - Sewing 3,845,500 4,800,000 Jun-30 Accounts Receivable Sales 4,800,000 3,925,500 Jun-30 Cost of goods sold Finished goods inventory 3,925,500 Please comment if you have any doubt Please give feedback