Question

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 $ 59,000 $ 110,000 Work in process inventory 443,500 607,000 Finished goods inventory 624,000 566,000 The following additional information describes the company's production activities for May. Raw materials purchases (on credit) $ 300,000 Factory wages cost (paid in cash) 1,576,000 Other overhead cost (Other Accounts credited) 72,000 Materials used Direct $ 177,000 Indirect 72,000 Labor used Direct $ 800,000 Indirect 776,000 Overhead rate as a percent of direct labor 115 % Sales (on credit) $ 3,500,000 The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.Compute the cost of products transferred from production to finished goods and cost of goods sold. Im having a issue finding cost of goods manufacuted and cost of goods sold.

Answer 1

Answer

The cost of products transferred from production to finished goods and cost of goods sold:

Particulars	Amount
Beginning Goods in Process Inventory	$443500
Direct Material Used	$177000
Direct Labor Used	$800000
Overheads (800000*115%)	$920000
Total Production Costs	$2340500
Less Ending Goods In Process Inventory	($607000)
Transferred to Finshed Goods Inventory	$1733500
Beginning Finished Goods Inventory	$624000
Goods Available for Sale	$2357500
Less Ending Finished Goods Inventory	($566000)
Total Cost of Goods Sold	$1791500