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. Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor Direct labor-Cutting Direct labor-Stitching The following additional information describes the company's production activities for May. Factory Overhead (Actual costs). Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales $ 16,600 66,400 Beginning Inventory $ 16,000 (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold 63,500 83,300 24,100 $ 35,000 22,250 0 Ending Inventory $ 17,950 70,500 66,700 12,250 $ 10,800 55,400 49,000 150% of direct materials used 120% of direct labor used $ 336,000 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.
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. Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor Direct labor-Cutting Direct labor-Stitching The following additional information describes the company's production activities for May. Factory Overhead (Actual costs). Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales $ 16,600 66,400 Beginning Inventory $ 16,000 (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold 63,500 83,300 24,100 $ 35,000 22,250 0 Ending Inventory $ 17,950 70,500 66,700 12,250 $ 10,800 55,400 49,000 150% of direct materials used 120% of direct labor used $ 336,000 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.
Chapter1: Financial Statements And Business Decisions
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Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
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Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
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Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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![Required information
[The following information applies to the questions displayed below.]
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.
Raw materials inventory
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory
Direct materials
Raw materials purchased on credit
Direct materials used-Cutting
Direct materials used-Stitching
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
$ 16,600
66,400
Beginning
Inventory
$ 16,000
63,500
83,300
24,100
(a) Transferred to work in process-Stitching
(b) Transferred to finished goods
(c) Cost of goods sold
$ 35,000
22,250
0
Ending
Inventory
$ 17,950
70,500
66,700
12,250
$ 10,800
55,400
49,000
150% of direct materials used
120% of direct labor used
$ 336,000
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe82db811-53d0-4f88-b29a-aa79559eb256%2F39c28e97-74fc-42f2-908f-45ff74e00377%2F5cnmadu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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.
Raw materials inventory
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory
Direct materials
Raw materials purchased on credit
Direct materials used-Cutting
Direct materials used-Stitching
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
$ 16,600
66,400
Beginning
Inventory
$ 16,000
63,500
83,300
24,100
(a) Transferred to work in process-Stitching
(b) Transferred to finished goods
(c) Cost of goods sold
$ 35,000
22,250
0
Ending
Inventory
$ 17,950
70,500
66,700
12,250
$ 10,800
55,400
49,000
150% of direct materials used
120% of direct labor used
$ 336,000
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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