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 $ 71,000 173,500 $ 85,600 125,500 100,800 34,250 193,300 46,100 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 $ 22,100 88,400 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 90,000 25,000 0 $ 50,400 57,600 60,000 Factory Overhead Rates Cutting Stitching Sales 150% of direct materials used 120% of direct labor used $ 776,000 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 inished goods, and (c) cost of goods sold. Hint: Compute the total production costs in each department and then subtract the ending nventory 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