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	192000	225000
Work in process inventory—Weaving	480000	425000
Work in process inventory—Sewing	715000	960000
Finished goods inventory	1346000	1306000

Raw materials purchases (on credit)	595,000
Factory payroll cost (paid in cash)	3,280,000
Other factory overhead cost (Other Accounts credited)	212,000
Materials used
Direct—Weaving	256,000
Direct-Sewing	500,000
Indirect	174,000
Labor Used
Direct—Weaving	1,225,000
Direct—Sewing	500,000
Indirect	1,775,000
Overhead rates as a percent of direct labor
Weaving	85%
Sewing	160%
Sales (on credit)	4,400,000

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, (c) sale of finished goods, and (d) cost of goods sold.

1. Prepare journal entries dated June 30 to record: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor usage, (e) indirect labor usage, (f) other overhead costs, (g) overhead applied, and (h) payment of total payroll costs.

Answer 1

				Weaving	Sewing
	Beginning wip			480,000	715,000
	transferred to sewing				2,577,250
	Cost added during the year
	Direct materiald			256,000	500,000
	direct labor			1,225,000	500,000
	overhead applied			1041250	800000
	total cost added			2,522,250	1,800,000
	total cost .			3,002,250	5,092,250
	less ending inventory			425,000	960,000
	cost completed			2,577,250	4,132,250
	cost of goods sold
	beginning finished goods inventory				1,346,000
	Add cost from sewing				4,132,250
	total goods Available				5,478,250
	Ending finished goods inventory				1,306,000
	cost of goods sold				4,172,250
1)	a)Cost of products transferred from weaving to sewing						2,577,250
	b)cost of products transferred from sewing to finished-						4,132,250
	c)cost of goods sold -						4,172,250
2)	Journal entries
	Accounting titles & explanations					Debit	Credit
1)	Work in process -sewing					2,577,250
	work in process-weaving						2,577,250
2)	Finished goods inventory					4,132,250
	work in process -sewing						4,132,250
4)	Cost of goods sold					4,172,250
	finished goods inventory						4,172,250
3)	Accounts receivable					4,350,000
	Sales						4,350,000
	sale of goods on account
	Journal Entries
	Accounting titles & explanations					Debit	Credit
a)	Raw materials inventory					595,000
	Accounts payable						595,000
b)	Work in process inventory-weaving					256,000
	Work in process inventory-sewing					500,000
	Raw materials inventory						756,000
c)	Factory overhead					174,000
	Raw materials inventory						174,000
d)	Work in process inventory-weaving					1,225,000
	Work in process inventory-sewing					500,000
	Factory wages payable						1,725,000
e)	Factory overhead					1,755,000
	Factory wages payable						1,755,000
f)	Factory overhead					212,000
	Accounts payable						212,000
g)	Work in process inventory-weaving					1041250
	Work in process inventory-sewing					800000
	Factory overhead						1841250
h)	Factory wages payable					3,280,000
	cash						3,280,000