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 Raw materials inventory $ 60,000 $ 92,500 Work in process inventory 435,000 515,000 Finished goods inventory 633,000 605,000 The following additional information describes the company's production activities for May. $ 250,000 1,530,000 87,000 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) $ 157,500 60,000 $ 780,000 750,000 115% $2,500,000 x Answer is complete but not entirely correct. RM - April 30 Raw Materials (RM) Indirect 60.000 materials 250,000 DM used 178.000 WIP - April 30 Work in Process (WIP) Cost of goods 435,000 manuf. 157.500 1,754 500 RM purchases 60.000 X DM used DL used 780,000 897,000 Overhead applied WIP - May 31 92,500 RM- May 31 515,000 Factory Wages Payable Finished Goods (FG) 633,000 Total Factory wages paid 780.000 X FG - April 30 1,782,500 Cost of goods sold 1,530,000 Indirect labor DL used 31 750,000 X 1,754,500 Cost of goods manuf. FG - May 31 605,000 3 Income Statement Partial) 897,000 Sales $ 2,500,000 Indirect materials Factory Overhead Overhead 87.000 applied 60,000 X 750,000 X Indirect labor Cost of goods sold Gross profit 1,782,500 717,500 $ Other overhead costs 0 Underapplied OH $ 1,754,500 o Cost of goods transferred Cost of goods sold $ 1,782,500