Problem 03-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4 [The following information applies to the questions displayed below.) Sierra Company manufactures 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: Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory Beginning Ending Inventory Inventory 133,500 105,500 153,300 88,400 38,100 26,250 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 $ 70,000 24,000 0 Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) $ 20,100 80,400 157,300 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 36,000 56,800 56,000 Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $616,000 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. Work in Process (WIP) - Cutting 133,500 C of GM - Cutting 24,000 WIP - April 30 Direct materials - Cutting Direct labor - Cutting Overhead - Cutting WIP - May 31 105,500 263,000 Work in Process (WIP) - Stitching 153,300 C of GM - Stitching 294,605 WIP - April 30 C of GM - Cutting Direct labor - Stitching Overhead - Stitching WIP - May 31 80,400 60,905 Finished Goods (FG) 38,100 Cost of goods sold 271,430 FG - April 30 C of GM - Stitching FG - May 31 233,330 7 May 31 Factory overhead 56,000 Other accounts 56,000 8 May 31 Work in process inventoryCutting Work in process inventoryStitching Factory wages payable 9 May 31 Work in process inventoryStitching Work in process inventory-Cutting 10 May 31 Finished goods inventory Work in process inventoryStitching 11 May 31 Cost of goods sold Finished goods inventory 12 May 31 Accounts receivable Sales