Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter...

 

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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 Raw materials inventory $ 6,000 $ 3,250 Work in process inventory-Cutting 43,500 51,500 Work in process inventory-Stitching Finished goods inventory 60,500 8,250 The following additional information describes the company's production activities for May. 63,300 20,100 Direct Materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct Labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) Factory Overhead (actual costs) Indirect materials used Indirect labor used $25,000 21,750 0 $ 15,600 62,400 133,000 $ 6,000 55,000 47,000 Other overhead costs Factory Overhead Rates Cutting Stitching Sales 150% of direct materials used 120% of direct labor used $256,000 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. Check (1c) Cost of goods sold, $213,905 2. Prepare summary journal entries dated May 31 to record the following May activities: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs (credit Other Accounts), (h) overhead applied, (i) goods transferred from Cutting to Stitching, (f) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales. 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 Raw materials inventory $ 6,000 $ 3,250 Work in process inventory-Cutting 43,500 51,500 Work in process inventory-Stitching Finished goods inventory 60,500 8,250 The following additional information describes the company's production activities for May. 63,300 20,100 Direct Materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct Labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) Factory Overhead (actual costs) Indirect materials used Indirect labor used $25,000 21,750 0 $ 15,600 62,400 133,000 $ 6,000 55,000 47,000 Other overhead costs Factory Overhead Rates Cutting Stitching Sales 150% of direct materials used 120% of direct labor used $256,000 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. Check (1c) Cost of goods sold, $213,905 2. Prepare summary journal entries dated May 31 to record the following May activities: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs (credit Other Accounts), (h) overhead applied, (i) goods transferred from Cutting to Stitching, (f) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales.