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: Work in process inventory-Cutting Work in process inventory-stitching Finished goods inventory Beginning Inventory 43,500 63,300 20,100 Ending Inventory 51,58e 68,500 8,250 The following additional information describes the company's production activities for May. $ 25, eee Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching 21,750 Direct labor Direct labor-Cutting Direct labor-stitching Total factory payroll paid (in cash) $ 15,600 62,480 133,eee Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 6,080 55,000 47, Factory Overhead Rates Cutting (150% of direct materials used) Stitching (120% of direct labor used) Sales $256,080 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. Ignore any over- or under-applied overhead in the calculation of cost of goods sold. Work in Process (WIP) - Cutting RM - April 30 Work in Process (WIP) - Stitching Finished Goods (FG) 2. Prepare summary Journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) Indirect materials usage, (d) direct labor costs incurred, (e) Indirect labor costs incurred, (1) payment of factory payroll, (g) other overhead costs, (credit Other Accounts), (h) overhead applied, (1) goods transferred from Cutting to Stitching, D) goods transferred from Stitching to finished goods, (k) cost of goods sold, and (1) sales. Answer is not complete. No Date General Journal Debit Credit 1 May 31 25,000 Raw materials inventory Accounts payable > 25.000 2 May 31 20,100 % Work in process inventory-Cutting Raw materials inventory 20.100 3 May 31 8,000 Factory overhead Raw materials inventory > 8,000 4 May 31 15,600 Work in process inventory-Cutting Work in process inventory-Stitching Factory wages payable 62,400 78,000 5 > May 31 Factory overhead Factory wages payable 6 > May 31 Factory wages payable Cash 7 May 31 Factory overhead OO Other accounts 8 May 31 Work in process inventory-Stitching Work in process inventory-Cutting Factory overhead 9 May 31 Work in process inventory-Stitching Work in process inventory-Cutting >> >> 10 May 31 Finished goods inventory Work in process inventoryStitching 11 May 31 Cost of goods sold Finished goods inventory 12 May 31 Accounts receivable Sales
