Required information Problem 3-5A (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 53,500 $ 11,000 $ 11,800 65,500 63,600 10,250 73,300 22,100 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 $ 30,000 22,000 Direct labor-Cutting $16,100 64,400 Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching $ 7,200 55,200 40,000 150% of direct materials used 120% of direct labor used 6 1 of 2 Factory Overbead (Actual costs) Indirect materials used Indirect labor used other overhead costs Factory Overhead Bates Cutting Stitching Sales ok mces $7,200 55,200 150% of direct materials used 120% of direct labor d $296,000 Problem 3-5A (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