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 $ 51,000 133,500 $ 61,000 105,500 153,300 38,100 88,400 26,250 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 $ 70,000 24,000 0 Direct labor-Cutting Direct labor-Stitching Factory Overhead (Actual costs) Indirect materials used Indirect labor used $ 20,100 80,400 $ 36,000 56,800 56,000 Other overhead costs Factory Overhead Rates Cutting Stitching 150% of direct materials used 120% of direct labor used Sales $ 616,000 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 $ 108,100 (b) Transferred to finished goods (c) Cost of goods sold