Case study on the stitching department
Transferred-in costs, weighted-average method. Spelling Sports, which produces basketballs, has two departments: cutting and stitching. Each department has one direct-cost category (direct materials) and one indirect-cost category (conversion costs). This problem focuses on the stitching department. Basketballs that have undergone the cutting process are immediately transferred to the stitching department. Direct material is added when the stitching process is 70% complete. Conversion costs are added evenly during stitching operations. When those operations are done, the basketballs are immediately transferred to Finished Goods. Spelling Sports uses the weighted-average method of process costing. The following is a summary of the March 2017 operations of the stitching department:
1. Summarize total stitching department costs for March 2017, and assign these costs to units completed (and transferred out) and to units in ending work in process.
2. Prepare journal entries for March transfers from the cutting department to the stitching department and from the stitching department to Finished Goods.
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