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.
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.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter26: Manufacturing Accounting: The Job Order Cost System
Section: Chapter Questions
Problem 2SEB: SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Sanchez Welding and...
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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.
![Beginning
Inventory
Ending
Inventory
$ 97,900
135,500
107,000
38,250
Raw materials inventory
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory
$ 81,000
193,500
213,300
50,100
The following additional information describes the company's production activities for May.
Direct materials
Raw materials purchased on credit
ct materials
Direct materials used-Stitching
$ 100,000
25,500
sed-Cutting
Direct labor
Direct labor-Cutting
Direct labor-Stitching
$ 23,100
92,400
Factory Overhead (Actual costs)
$ 57,600
58,000
62,000
Indirect materials used
Indirect labor used
Other overhead costs
Factory Overhead Rates
Cutting
Stitching
150% of direct materials used
120% of direct labor used
Sales
$ 856,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F055ebc22-c240-434c-ac54-93d436bf7ab7%2Ffb128219-fca8-4121-8936-824294cc55c1%2Fn27gqrp_processed.png&w=3840&q=75)
Transcribed Image Text:Beginning
Inventory
Ending
Inventory
$ 97,900
135,500
107,000
38,250
Raw materials inventory
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory
$ 81,000
193,500
213,300
50,100
The following additional information describes the company's production activities for May.
Direct materials
Raw materials purchased on credit
ct materials
Direct materials used-Stitching
$ 100,000
25,500
sed-Cutting
Direct labor
Direct labor-Cutting
Direct labor-Stitching
$ 23,100
92,400
Factory Overhead (Actual costs)
$ 57,600
58,000
62,000
Indirect materials used
Indirect labor used
Other overhead costs
Factory Overhead Rates
Cutting
Stitching
150% of direct materials used
120% of direct labor used
Sales
$ 856,000
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Step 1
Process costing refers to an accounting system which is used by manufacturing companies who are producing large number of similar products. It is used to assign the cost of products in a systematic manner.
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