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. The company uses a single processing department. The following information is available regarding its May inventories Raw materials inventory Work in process inventory Finished goods inventory Beginning Inventory $ 65,000 404,000 625,000 Ending Inventory $ 72,500 527,000 570,001 The following additional information describes the company's production activities for May. Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used $ 280,000 1,594,000 40,000 Direct Indirect $ 186,500 86,000 Labor used Direct Indirect $ 800,000 794,000 115% Overhead rate as a percent of direct labor Sales (on credit) $4,500,000 The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost