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 $ 138,000 $ 277,000 Work in process inventory—Weaving 335,000 350,000 Work in process inventory—Sewing 630,000 800,000 Finished goods inventory 1,306,000 1,316,000 The following additional information describes the company’s manufacturing activities for June: Raw materials purchases (on credit) $ 700,000 Factory wages cost (paid in cash) 3,440,000 Other factory overhead cost (Other Accounts credited) 162,000 Materials used Direct—Weaving $ 274,000 Direct—Sewing 117,000 Indirect 172,000 Labor used Direct—Weaving $ 1,400,000 Direct—Sewing 485,000 Indirect 1,500,000 Overhead rates as a percent of direct labor Weaving 90 % Sewing 150 % Sales (on credit) $ 4,050,000 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. 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) sale of finished goods.

Answer 1

Answer 1:

(a) cost of products transferred from weaving to sewing = $2,919,000

Workings:

(b) cost of products transferred from sewing to finished goods = $4,078,500

(c) cost of goods sold = $4,068,500

Answer 2:

(a)

(b)

(c)