Pro-Weave manufactures stadium blankets by passing the products through a weavin

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:

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.

NOT SURE IF THESE ARE CORRECT??

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:

Explanation / Answer

Solution:

In order to find out the answer and amount of transfer we need to prepare T-account for Work In Process – Weaving and Sewing and finished goods inventory.

a,b & c

(a)

From weaving to sewing

$2,587,500

(b)

From sewing to finished goods

$3,507,500

(c)

Cost of goods sold

$3,387,500

Here is the working:

Work In Process Inventory - Weaving

Debit

Credit

Beginning Inventory

$330,000

$2,587,500

Work In Process transferred to WIP-Sewing

Direct material used

$280,000

Direct labor used

$1,350,000

Applied Overheads (1350,000*85%)

$1,147,500

$520,000

Ending Inventory

$3,107,500

$3,107,500

Work In Process Inventory - Sewing

Debit

Credit

Beginning Inventory

$720,000

$3,507,500

Goods trfd to Finished Goods Inventory

Direct material used

$105,000

Direct labor used

$400,000

Applied Overheads (400,000*155%)

$620,000

Transferred from WIP - Weaving

$2,587,500

$925,000

Ending Inventory

$4,432,500

$4,432,500

Finished Goods Inventory

Debit

Credit

Beginning Inventory

$1,346,000

$3,387,500

Cost of Goods Sold

Trfd from WIP - Sewing

$3,507,500

$1,466,000

Ending Inventory

$4,853,500

$4,853,500

Journal Entries

No

Date

General Journal

Debit

Credit

1

30-Jun

Work in process inventory—Sewing

$2,587,500

1

Work in process inventory—Weaving

$2,587,500

2

30-Jun

Finished goods inventory

$3,507,500

2

Work in process inventory—Sewing

$3,507,500

3

30-Jun

Accounts receivable

$5,350,000

3

Sales

$5,350,000

4

30-Jun

Cost of goods sold

$3,387,500

4

Finished goods inventory

$3,387,500

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

(a)

From weaving to sewing

$2,587,500

(b)

From sewing to finished goods

$3,507,500

(c)

Cost of goods sold

$3,387,500

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