Question

10096 Required information (The following information applies to the questions displayed below) Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct material production at the beginning of the Cutting process. The following information is available regarding its May inve Beginning Ending Inventory Inventory Work in process inventory-Cutting 223,500 150,500 Work in process inventory-Stitching 243,300 116,300 Finished goods inventory 56,100 44,250 Collapse 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 $115,000 26,250 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 24,600 98,400 181,600 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 68,400 58,600 65,000 Factory Overhead Rates Cutting (1508 of direct materials used) Stitching (1208 of direct labor used) Sales $976,000

Answer 1

Requirement 1:

(a) Production costs transferred from cutting to stitching	$ 163,225
(b) Production costs transferred from stitching to finished goods	$ 506,705
(c) Cost of goods sold	$ 518,555

Work in Process (WIP)-Cutting
Beginning Inventory	$        223,500	Transfer to WIP-Stitching	$        163,225
Direct Materials(DM)	$          26,250
Direct Labor (DL)	$          24,600
Factory Overhead(OH) @150% of DM	$          39,375
Ending Balance	$        150,500
Work in process (WIP)-Stitching
Beginning Inventory	$        243,300	Transfer to FG	$        506,705
Direct Labor (DL)	$          98,400
Factory Overhead(OH) @120% of DL	$        118,080
Transfer from WIP-Cutting	$        163,225
Ending Balance	$        116,300
Finished Goods (FG)
Beginning Inventory	$          56,100	Cost of goods sold	$        518,555
Transfer from WIP- Stitching	$        506,705
Ending Balance	$          44,250