Problem 20-1A Production cost flow and measurement; journal entries LO P1, P2, 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
Work in process inventoryCutting		63,500			70,500
Work in process inventoryStitching		83,300			66,700
Finished goods inventory		24,100			12,250

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

Direct materials
Raw materials purchased on credit	$	35,000
Direct materials usedCutting		22,250
Direct materials usedStitching		0

Direct labor
Direct laborCutting	$	16,600
Direct laborStitching		66,400
Total factory payroll paid (in cash)		138,400

Factory Overhead (Actual costs)
Indirect materials used	$	10,800
Indirect labor used		55,400
Other overhead costs		49,000

Factory Overhead Rates
Cutting	(150% of direct materials used			)
Stitching	(120% of direct labor used			)
SALES Value	$336,000

rev: 01_28_2020_QC_CS-197408

Problem 20-1A 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.

2. Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs, (credit Other Accounts), (h) overhead applied, (i) goods transferred from Cutting to Stitching, (j) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (l) sales.