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 | $124,000 | $225,000 |
| Work in process inventory-weaving | 475,000 | 415,000 |
| Work in process inventory-Sewing | 645,000 | 725,000 |
| Finished goods inventory | 1,276,000 | 1,416,00 |
The following additional information describes the company's manufacturing activities for June.
| Raw materials purchases (on credit) | $505,000 |
|---|---|
| Factory wages cost (paid in cash) | 3,220,000 |
| Other factory overhead cost (Other Accounts credited) | 186,000 |
| Materials used | |
| Direct-Weaving | $304,000 |
| Direct-Sewing | 84,000 |
| Indirect | 164,000 |
| Lbor used | |
| Direct-Weaving | $1,275,000 |
| Direct-Sewing | 485,000 |
| Indirect | 1,525,000 |
| Overhead rates as a percent of direct labor | |
| Weaving | 85% |
| Sewing | 155% |
| Sales (on credited) | $5,350,000 |
1. Compute the (a) cost of products transferred from weaving to sewing, (b) cost of products transferred from sewing to finished goods, and (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, and (c) scale of finished goods.
| Date | General Journal | Debit | Credit |
|---|---|---|---|
| June 30 | |||
Manufacturing Cost Flow:
The flow of manufacturing costs are required to determine costs that should be recorded in work in process, finished goods and cost of goods sold. Manufacturing costs include direct materials,direct labor and manufacturing overhead. Balances in work in process and finished goods will be recorded as inventories on the company's balance sheet while cost of goods sold will be recorded in the income statement.
Answer and Explanation: 1
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1a.
Cost of Goods Manufactured in Weaving Department
| Materials used | 304,000 |
| Direct labor | 1,275,000 |
| Manufacturing overhead | 1,083,750... |
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Chapter 4 / Lesson 3The flow of costs examines how costs accumulate throughout the production process to inform pricing requirements. Learn how the different facets of manufacturing combine with labor and overhead costs, and the significance of well-kept journal entries.