Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its May inventories

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	54,000		$	1,500
Work in process inventory		428,500			565,000
Finished goods inventory		626,000			597,000

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

Raw materials purchases (on credit)	$	250,000
Factory wages cost (paid in cash)		1,557,000
Other overhead cost (Other Accounts credited)		32,000
Materials used
Direct	$	214,500
Indirect		88,000
Labor used
Direct	$	780,000
Indirect		777,000
Overhead rate as a percent of direct labor		115	%
Sales (on credit)	$	5,500,000

The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.

Problem 20-1A Part 1

Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold.

Raw Materials (RM)					Work in Process (WIP)
Factory Wages Payable					Finished Goods (FG)
Factory Overhead					Income Statement (Partial)
						$0
					Cost of goods transferred
					Cost of goods sold