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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.

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.

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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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
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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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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