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(a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold

(a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the cutting process. The following information is available regarding its May inventories: Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory The following additional information describes the company's production activities for May. Direct labor Direct labor-Cutting Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales Beginning Inventory $ 6,000 43, 500 63,300 20, 100 (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold $ 25,000 21, 750 0 $ 15,600 62,400 Ending Inventory $9,250 $ 6,000 55,000 46,505 51, 500 60, 500 8,250 150% of direct materials used 120% of direct labor used $ 256,000 Required: 1.Compute the amount of (a) production costs transferred from Cutting to Stitching, (b) production costs transferred from Stitching to finished goods, and (c) cost of goods sold. Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department.
Transcribed Image Text:Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the cutting process. The following information is available regarding its May inventories: Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory The following additional information describes the company's production activities for May. Direct labor Direct labor-Cutting Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales Beginning Inventory $ 6,000 43, 500 63,300 20, 100 (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold $ 25,000 21, 750 0 $ 15,600 62,400 Ending Inventory $9,250 $ 6,000 55,000 46,505 51, 500 60, 500 8,250 150% of direct materials used 120% of direct labor used $ 256,000 Required: 1.Compute the amount of (a) production costs transferred from Cutting to Stitching, (b) production costs transferred from Stitching to finished goods, and (c) cost of goods sold. Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department.
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