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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
Work in process inventoryCutting 183,500 130,500
Work in process inventoryStitching 203,300 103,900
Finished goods inventory 48,100 36,250

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

Direct materials
Raw materials purchased on credit $ 95,000
Direct materials usedCutting 25,250
Direct materials usedStitching 0

Direct labor
Direct laborCutting $ 22,600
Direct laborStitching 90,400
Total factory payroll paid (in cash) 170,800

Factory Overhead (Actual costs)
Indirect materials used $ 54,000
Indirect labor used 57,800
Other overhead costs 61,000

Factory Overhead Rates
Cutting (150% of direct materials used )
Stitching (120% of direct labor used )
Sales $816,000

Problem 20-1A 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.

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