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Problem - 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
$352,000
439,500
Overhead rate as a percent of direct labor
110%
Sales (on credit)
$1,500,000
Required -
(a) Compute the cost of products transferred from production to finished goods.
(b) Compute the cost of goods sold.
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