Problem 3-1A 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	$	53,000		$	34,500
Work in process inventory		421,500			523,000
Finished goods inventory		638,000			542,000

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

Raw materials purchases (on credit)	$	260,000
Factory wages cost (paid in cash)		1,530,000
Other overhead cost (Other Accounts credited)		44,000
Materials used
Direct	$	214,500
Indirect		64,000
Labor used
Direct	$	780,000
Indirect		750,000
Overhead rate as a percent of direct labor		110	%
Sales (on credit)	$	5,500,000

The predetermined overhead rate was computed at the beginning of the year as 110% of direct labor cost.

Problem 3-1A Part 1

Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold.

Raw Materials (RM) 260,000 Indirect materials 53,000 DM used RM purchases RM - April 30 1,751,000 64,000 214,500 Work in Process (WIP) 421,500 Cost of goods manuf. 214,500 WIP - April 30 DM used IDL used 780,000 Overhead applied 858,000 Factory Wages Payable Total Factory wages paid 1,530,000 DL used Indirect labor 780,000 750,000 FG - April 30 Cost of goods manuf. Finished Goods (FG) 638,000 Cost of goods sold 1,751,000 Income Statement (Partial) 858,000 Other overhead costs Indirect labor Factory Overhead 44,000 Overhead applied 750,000 64,000 Indirect materials $ 0 Cost of goods transferred Cost of goods sold