equired 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 woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information is available regarding its May inventories

	Beginning Inventory	Ending Inventory
Raw materials inventory	$55,000	$34,000
Work in process inventory	417,500	577,000
Finished goods inventory	601,000	541,000

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

Raw materials purchases (on credit)	$270,000
Factory wages cost (paid in cash)	1,575,000
Other overhead cost (Other Accounts credited)	87,000
Materials used
Direct	$215,000
Indirect	76,000
Labor used
Direct	$790,000
Indirect	785,000
Overhead rate as a percent of direct labor	120%
Sales (on credit)	$4,500,000

The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost.

rev: 09_05_2017_QC_CS-97362

Problem 20-1A Part 1

Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold.

2. Prepare summary journal entries dated May 31 to record the following production activities during May: (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, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.