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 $ 41,000 $ 48,700 Work in process inventory—Cutting 113,500 95,500 Work in process inventory—Stitching 133,300 82,200 Finished goods inventory 34,100 22,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 60,000 Direct materials used—Cutting 23,500 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 19,100 Direct labor—Stitching 76,400 Factory Overhead (Actual costs) Indirect materials used $ 28,800 Indirect labor used 56,400 Other overhead costs 54,000 Factory Overhead Rates Cutting 150% of direct materials used Stitching 120% of direct labor used Sales $ 536,000 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.

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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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 $ 41,000 $ 48,700 Work in process inventory—Cutting 113,500 95,500 Work in process inventory—Stitching 133,300 82,200 Finished goods inventory 34,100 22,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 60,000 Direct materials used—Cutting 23,500 Direct materials used—Stitching 0 Direct labor Direct labor—Cutting $ 19,100 Direct labor—Stitching 76,400 Factory Overhead (Actual costs) Indirect materials used $ 28,800 Indirect labor used 56,400 Other overhead costs 54,000 Factory Overhead Rates Cutting 150% of direct materials used Stitching 120% of direct labor used Sales $ 536,000 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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