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 $ 26,000 83,500 $ 30,250 80,500 72,900 16,250 103,300 28,100 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 Other overhead costs Factory Overhead Rates Cutting Stitching Sales $ 17,600 70,400 $ 45,000 22,750 $ 18,000 55,800 51,000 0 150% of direct materials used 120% of direct labor used $ 416,000 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