Edison Company - cost of goods manufactured and sold - 14 Nov, 2012
Edison Company manufactures wool blankets and accounts for production costs using process costing. The following information is available regarding its May inventories.
Beginning Inventory Ending Inventory
Raw materials inventory $28,000 $25,500
Goods in process inventory 220,750 252,000
Finished goods inventory 319,000 277,000
The following additional information describes the company's production activities for May.
Raw material purchases (on credit) $135,000
Factory payroll cost (paid in cash) 791,500
Other overhead cost (Other accounts credited) 43,000
Overhead rate as a percent of direct labor 110%
Sales (on credit) 1,500,000
I figured out that the cost of goods sold is $843,450 and I'm stuck on the rest of what it's asking me to do. Please help!
1. Compute the cost of (a) products transferred from production to finished goods and (b) goods sold.
2. Prepare summary journal entries dated May 31 to record the following production activities during May:
a) raw materials purchase
b) direct materials usage
c) indirect materials usage
d) payroll costs
e) direct labor costs
f) indirect labor costs
g other overhead costs
h) overhead applied
i) goods transferred from production to finished goods
j) sale of finished goods.
The flow of production costs and journal entries are provided.