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. Beginning Inventory Ending Inventory Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory $ 61,000 153,500 $ 73,300 115,500 173,300 94,600 42,100 30,250 The following-additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor $ 80,000 24,500 0 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 $ 21,100 84,400 $ 43,200 57,200 58,000 150% of direct materials used 120% of direct labor used $ 696,000 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. (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold
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. Beginning Inventory Ending Inventory Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory $ 61,000 153,500 $ 73,300 115,500 173,300 94,600 42,100 30,250 The following-additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor $ 80,000 24,500 0 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 $ 21,100 84,400 $ 43,200 57,200 58,000 150% of direct materials used 120% of direct labor used $ 696,000 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. (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Beginning
Inventory
Ending
Inventory
Raw materials inventory
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory
$ 61,000
153,500
$ 73,300
115,500
173,300
94,600
42,100
30,250
The following-additional information describes the company's production activities for May.
Direct materials
Raw materials purchased on credit
Direct materials used-Cutting
Direct materials used-Stitching
Direct labor
$ 80,000
24,500
0
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
$ 21,100
84,400
$ 43,200
57,200
58,000
150% of direct materials used
120% of direct labor used
$ 696,000
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.
(a) Transferred to work in process-Stitching
(b) Transferred to finished goods
(c) Cost of goods sold
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