Question

Required information

Problem 20-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4

[The following information applies to the questions displayed below.]

Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the Cutting process. The following information is available regarding its May inventories:

Beginning

Inventory

Ending

Inventory

Work in process inventory—Cutting

43,500

51,500

Work in process inventory—Stitching

63,300

60,500

Finished goods inventory

20,100

8,250

The following additional information describes the company's production activities for May.

Direct materials

Raw materials purchased on credit

$

25,000

Direct materials used—Cutting

21,750

Direct materials used—Stitching

0

Direct labor

Direct labor—Cutting

$

15,600

Direct labor—Stitching

62,400

Total factory payroll paid (in cash)

133,000

Factory Overhead (Actual costs)

Indirect materials used

$

6,000

Indirect labor used

55,000

Other overhead costs

47,000

Factory Overhead Rates

Cutting

(150% of direct materials used

)

Stitching

(120% of direct labor used

)

Sales

$256,000

rev: 01_28_2020_QC_CS-197408

Problem 20-1A Part 1

Required:

1. Compute the amount of (a) production costs transferred from Cutting to Stitching, (b) production costs transferred from Stitching to finished goods, and (c) cost of goods sold. Ignore any over- or under-applied overhead in the calculation of cost of goods sold.

20 Problems Help Save & Exit Submit Check my work Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the Cutting process. The following information is available regarding its May inventories: Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Beginning Ending Inventory Inventory 43,500 51.500 63,30 60,500 20,100 8.250 The following additional information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-stitching $ 25,000 21,750 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 15,600 62.400 133,000 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 6,000 55,000 47,000 Factory Overhead Rates Cutting (1509 of direct materials used) Stitching (1209 of direct labor used) Sales $256,000 Prev 1 2 of 3 !! Next >

Answer 1

DEBIT	AMOUNT $	CREDIT	AMOUNT $
WIP - Cutting
Op Bal.	43500	WIP - Stitching	61975
DM	21750	cl.Bal.	51500
DL	15600
OH (150% of DM)	32625
Total	113475	Total	113475
WIP - Stitching
Op Bal.	63300	FG Inventory	202055
WIP - Cutting	61975	cl.Bal.	60500
DL	62400
OH (120% of DL)	74880
Total	262555	Total	262555
FG Inventory
Op Bal.	20100	COGS	213905
WIP - Stitching	202055	cl.Bal.	8250
Total	222155	Total	222155
a) Production costs transferred from Cutting to Stitching = 61975
b) Production costs transferred from Stitching to FG = 202055
c) Cost of Goods sold = 213905