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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

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 $ 106,000 $ 128,650
Work in process inventoryCutting 243,500 160,500
Work in process inventoryStitching 263,300 122,500
Finished goods inventory 60,100 48,250

The following additional information describes the company's production activities for May.

Direct materials
Raw materials purchased on credit $ 125,000
Direct materials usedCutting 26,750
Direct materials usedStitching 0
Direct labor
Direct laborCutting $ 25,600
Direct laborStitching 102,400
Factory Overhead (Actual costs)
Indirect materials used $ 75,600
Indirect labor used 59,000
Other overhead costs 67,000
Factory Overhead Rates
Cutting 150% of direct materials used
Stitching 120% of direct labor used
Sales $ 1,056,000

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.

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