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Problem 1 6 - 5 A ( Algo ) Production cost flow and measurement; journal entries LO P 3 , P 4 Skip to question

Problem 16-5A (Algo) Production cost flow and measurement; journal entries LO P3, P4
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[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
Raw materials inventory $ 66,000 $ 79,450
Work in process inventoryCutting 163,500120,500
Work in process inventoryStitching 183,30097,700
Finished goods inventory 44,10032,250
The following additional information describes the company's production activities for May.
Direct materials
Raw materials purchased on credit $ 85,000
Direct materials usedCutting 24,750
Direct materials usedStitching 0
Direct labor
Direct laborCutting $ 21,600
Direct laborStitching 86,400
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
Problem 16-5A (Algo) 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. Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department.

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