Pro Weave manufactures stadium blankets by passing the products through a weaving department and...
Question:
Pro Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department.
The following information is available regarding its June inventories:
| Beginning Inventory | Ending Inventory | |
|---|---|---|
| Raw materials inventory | $120,000 | $185,000 |
| Work in process inventory - Weaving | $300,000 | $330,000 |
| Work in process inventory - Sewing | $570,000 | $700,000 |
| Finished goods inventory | $1,266,000 | $1,206,000 |
The following additional information describes the company's manufacturing activities for June:
| Raw materials purchases (on credit) | $500,000 |
| Factory wages cost (paid in cash) | $3,060,000 |
| Other factory overhead cost (Other Accounts credited) | $156,000 |
| Materials used | |
| Direct-Weaving | $240,000 |
| Direct-Sewing | $75,000 |
| Indirect | $120,000 |
| Labor Used | |
| Direct-Weaving | $1,200,000 |
| Direct-Sewing | $360,000 |
| Indirect | $1,500,000 |
| Overhead rates as a percent of direct labor | |
| Weaving | 80% |
| Sewing | 150% |
Required:
1. Compute the:
a. cost of products transferred from weaving to sewing.
b. cost of products transferred from sewing to finished goods.
c. cost of goods sold.
| a | Sewing | |
| b | Finished Goods | |
| c | Cost of Goods Sold |
2. Prepare journal entries dated June 30 to record:
a. goods transferred from weaving to sewing.
b. goods transferred from sewing to finished goods.
c. sale of finished goods.
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | June 30 | |||
| 2 | June 30 | |||
| 3 | June 30 | |||
| 4 | June 30 | |||
Cost Of Goods Manufactured
Cost of goods manufactured relate to goods that have completed the manufacturing process and will be transferred from the work-in-process inventory account to the finished goods inventory account. To calculate cost of goods manufactured, a company will first need to determine total manufacturing costs. Total manufacturing costs include direct materials used in production, direct labor and manufacturing overhead. Beginning work-in-process inventory will be added to total manufacturing costs to determine total costs of work-in-process inventory. After which, ending work-in-process inventory will be deducted to compute cost of goods manufactured.
Answer and Explanation: 1
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View this answer1a.
Cost of Goods Manufactured in Weaving Department
| Materials used | 240,000 |
| Direct labor | 1,200,000 |
| Manufacturing overhead | 960,000 (1,200,000... |
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Chapter 3 / Lesson 13The cost of goods is the expenses used to produce products, provide services, or acquire inventory. Study the definition of cost of goods and how to calculate it in this lesson.