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
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. | |||
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