Question

L2001 - Based on Problem 20-1A Sierra Company LO P1, P2, P3, P4

Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its May inventories.

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	60,000		$	92,500
Work in process inventory		435,000			515,000
Finished goods inventory		633,000			605,000

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

Raw materials purchases (on credit)	$	250,000
Factory wages cost (paid in cash)		1,530,000
Other overhead cost (Other Accounts credited)		87,000
Materials used
Direct	$	157,500
Indirect		60,000
Labor used
Direct	$	780,000
Indirect		750,000
Overhead rate as a percent of direct labor		115	%
Sales (on credit)	$	2,500,000
requirement General Journal tab - Prepare journal entries to record the transactions of Sierra Company during the month of May. Cost of Materials Used tab - Calculate the total cost of direct materials used in production during May. Cost of Goods Manufactured tab - Prepare a schedule of cost of goods manufactured for Sierra Company for the month of May. Cost of Goods Sold tab - Prepare a schedule of cost of goods sold for Sierra Company for the month of May. Gross Profit tab - Calculate the gross profit on sales for May.

Answer 1