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Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available
Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its May inventories |
Beginning Inventory | Ending Inventory | |||||
Raw materials inventory | $ | 62,000 | $ | 114,000 | ||
Work in process inventory | 401,500 | 605,000 | ||||
Finished goods inventory | 638,000 | 123,001 | ||||
The following additional information describes the company's production activities for May. |
Raw materials purchases (on credit) | $ | 290,000 | |
Factory payroll cost (paid in cash) | 1,539,000 | ||
Other overhead cost (Other Accounts credited) | 78,000 | ||
Materials used | |||
Direct | $ | 178,000 | |
Indirect | 60,000 | ||
Labor used | |||
Direct | $ | 780,000 | |
Indirect | 759,000 | ||
Overhead rate as a percent of direct labor | 115 | % | |
Sales (on credit) | $ | 5,500,000 | |
The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost. |
3.
value: 7.50 points
Required information
Required: | |
1. | Compute the cost of products transferred from production to finished goods and cost of goods sold. |
RAW MATERIALS WORK IN PROCESS
FACTORY PAYROLL PAYABLE FINISHED GOODS
FACTORY OVERHEAD INCOME STATEMENT (PARTIAL)
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