Problem 16-1A 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	$	70,000		$	125,500
Work in process inventory		429,500			579,000
Finished goods inventory		611,000			521,000

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

Raw materials purchases (on credit)	$	290,000
Factory wages cost (paid in cash)		1,572,000
Other overhead cost (Other Accounts credited)		126,000
Materials used
Direct	$	172,500
Indirect		62,000
Labor used
Direct	$	800,000
Indirect		772,000
Overhead rate as a percent of direct labor		120	%
Sales (on credit)	$	6,500,000

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

Required information Problem 16-1A 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 Ending Inventory Inventory $ 70,000 $125,500 Raw materials inventory Work in process inventory Finished goods inventory 429,500 579,000 611,000 521,000 The following additional information describes the company's production activities for May. $ 290,000 1,572,000 126,000 $ Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) 172,500 62,000 $ 800,000 772,000 120% $6,500,000 The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost. Problem 16-1A Part 1 Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. Raw Materials (RM) Work in Process (WIP) Factory Wages Payable Finished Goods (FG) Factory Overhead Income Statement (Partial) $ 0 Cost of goods transferred Cost of goods sold Required information Problem 16-1A 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 Ending Inventory Inventory $ 70,000 $125,500 Raw materials inventory Work in process inventory Finished goods inventory 429,500 579,000 611,000 521,000 The following additional information describes the company's production activities for May. $ 290,000 1,572,000 126,000 $ Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) 172,500 62,000 $ 800,000 772,000 120% $6,500,000 The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost. Problem 16-1A Part 1 Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. Raw Materials (RM) Work in Process (WIP) Factory Wages Payable Finished Goods (FG) Factory Overhead Income Statement (Partial) $ 0 Cost of goods transferred Cost of goods sold