Question

Problem 03-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4

Skip to question

[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		163,500			120,500
Work in process inventory—Stitching		183,300			97,700
Finished goods inventory		44,100			32,250

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

Direct materials
Raw materials purchased on credit	$	85,000
Direct materials used—Cutting		24,750
Direct materials used—Stitching		0

 

Direct labor
Direct labor—Cutting	$	21,600
Direct labor—Stitching		86,400
Total factory payroll paid (in cash)		165,400

 

Factory Overhead (Actual costs)
Indirect materials used	$	46,800
Indirect labor used		57,400
Other overhead costs		59,000

 

Factory Overhead Rates
Cutting	(150% of direct materials used			)
Stitching	(120% of direct labor used			)
Sales	$736,000

rev: 01_28_2020_QC_CS-197408

Problem 03-1A 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.