! Required Information Problem 20-5A (Algo) Production cost flow and measurement; journal entries LO P3, P4 [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 Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory $ 106,000 243,500 $ 128,650 160,500 122,500 48,250 263,300 60,100 The following additional Information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor Direct labor-Cutting Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used $ 25,600 102,400 $ 125,000 26,750 $ 75,600 59,000 67,000 Other overhead costs Factory Overhead Rates Cutting Stitching Sales 150% of direct materials used 120% of direct labor used $ 1,056,000 Problem 20-5A (Algo) 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. Hint: Compute the total production costs in each department and then subtract the ending Inventory to get the amount transferred out of each department. (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods sold