Question
Required information Skip to question [The following information applies to the questions displayed below.] Sierra Company manufactures soccer balls in two sequential processes: Cutting and
Required information
Skip to question
[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:
Beginning Inventory | Ending Inventory | |
---|---|---|
Raw materials inventory | $ 6,000 | $ 9,250 |
Work in process inventoryCutting | 43,500 | 51,500 |
Work in process inventoryStitching | 63,300 | 60,500 |
Finished goods inventory | 20,100 | 8,250 |
The following additional information describes the company's production activities for May.
Direct materials | |
---|---|
Raw materials purchased on credit | $ 25,000 |
Direct materials usedCutting | 21,750 |
Direct materials usedStitching | 0 |
Direct labor | |
---|---|
Direct laborCutting | $ 15,600 |
Direct laborStitching | 62,400 |
Factory Overhead (Actual costs) | |
---|---|
Indirect materials used | $ 6,000 |
Indirect labor used | 55,000 |
Other overhead costs | 46,505 |
Factory Overhead Rates | |
---|---|
Cutting | 150% of direct materials used |
Stitching | 120% of direct labor used |
Sales | $ 256,000 |
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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started