Question

Required information [The following information applies to the questions displayed below.) 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 $ 148,000 500,000 580,000 1,406,000 Ending Inventory $ 257,000 515,000 945,000 1,326,000 The following additional information describes the company's manufacturing activities for June: $ 520,000 3,080,000 192,000 $ 298,000 129,000 126,000 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) $1,275,000 515,000 1,675,000 85% 165% $4,100,000 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

1.

a. Cost of product transferred from weaving to sewing:

	Weaving
Direct material used	298,000
Direct labor used	1,275,000
Applied overhead (1,275,000*85%)	1,083,750
Total manufacturing cost	2,656,750
Add: Beginning work in process	500,000
Less: Ending work in process	(515,000)
Cost of product transferred from weaving to sewing	$2,641,750

b. Cost of product transferred from sewing to finished goods

	Sewing department
Cost of product transferred from weaving	$2,641,750
Direct material used	129,000
Direct labor used	515,000
Applied overhead (515,000*165%)	849,750
Total manufacturing cost	4,135,500
Add: Beginning work in process	580,000
Less: Ending work in process	(945,000)
Cost of product transferred from sewing to finished goods	$3,770,500

c. Cost of goods sold:

	Finished goods
Transferred from sewing	$3,770,500
Beginning finished goods	1,406,000
Ending finished goods	(1,326,000)
Cost of goods sold	$3,850,500