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edison company manufactures wool blankets and accounts for product costs using proce 648431

Edison Company manufactures wool blankets and accounts for product 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 materials purchases (on credit)                   

$ 135,000

Factory payroll cost (paid in cash)                     

791,500

Other overhead cost (Other Accounts credited)         

43,000

Materials used

 

Direct                                         

$ 93,500

Indirect                                        

31,000

Labor used

 

Direct                                         

$ 352,000

Indirect                                         

439,500

Overhead rate as a percent of direct labor              

110%

Sales (on credit)                                   

$1,500,000

Required

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 purchases, (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, and (j) sale of finished goods.

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