Question
Stam Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the Cutting process. The
Stam 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 $ 121,000 $ 147,100 Work in process inventoryCutting 273,500 63,000 Work in process inventoryStitching 293,300 175,500 Finished goods inventory 250,100 54,250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit $ 140,000 Direct materials usedCutting 27,500 Direct materials usedStitching 0 Direct labor Direct laborCutting $ 27,100 Direct laborStitching 108,400 Factory Overhead (Actual costs) Indirect materials used $ 86,400 Indirect labor used 59,600 Other overhead costs 70,000 Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $ 1,176,000
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