Question
The following information applies to the questions displayed below.] Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are
The following information applies to the questions displayed below.] Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information is available regarding its May inventories.
Beginning Inventory | Ending Inventory | |||||
Raw materials inventory | $ | 60,000 | $ | 92,500 | ||
Work in process inventory | 435,000 | 515,000 | ||||
Finished goods inventory | 633,000 | 605,000 | ||||
The following additional information describes the company's production activities for May.
Raw materials purchases (on credit) | $ | 250,000 | |
Factory wages cost (paid in cash) | 1,530,000 | ||
Other overhead cost (Other Accounts credited) | 87,000 | ||
Materials used | |||
Direct | $ | 157,500 | |
Indirect | 60,000 | ||
Labor used | |||
Direct | $ | 780,000 | |
Indirect | 750,000 | ||
Overhead rate as a percent of direct labor | 115 | % | |
Sales (on credit) | $ | 2,500,000 | |
rev: 09_05_2017_QC_CS-97362
Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold.
2. Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory wages, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.
1 Record the purchase of raw materials.
2 Record direct materials used in production.
3 Record indirect materials used in production.
4 Record direct labor cost incurred, but not yet paid.
5 Record indirect labor cost incurred, but not yet paid.
6 Record payment of total factory payroll.
7 Record other overhead costs incurred (credit Other accounts).
8 Record overhead applied at 115% of direct labor cost.
9 Record the transfer of completed products from production to finished goods inventory.
10 Record the sale of finished goods.
11 Record cost of goods sold for May.
h 20 Homework Saved Help Save &Exit Check my Required information Required 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. Part 1 of 2 Raw Materials (RM) Work in Process (WIP) 0 olnts Skipped eBook Print Factory Wages Payable Finished Goods (FG) Factory Overhead Income Statement (Partial) Cost of goods transferred Cost of goods sold Prey2 of 4Next>
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