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Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information

Sierra Company manufactures woven blankets and accounts for product costs using process costing. Data below are for one of its processing departments. The following information is available regarding its May inventories

Beginning Inventory Ending Inventory
Raw materials inventory $ 59,000 $ 129,000
Work in process inventory 433,500 553,000
Finished goods inventory 628,000 553,000

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

Raw materials purchases (on credit) $ 300,000
Factory wages cost (paid in cash) 1,534,000
Other overhead cost (Other Accounts credited) 77,000
Materials used
Direct $ 164,000
Indirect 66,000
Labor used
Direct $ 780,000
Indirect 754,000
Overhead rate as a percent of direct labor 115 %
Sales (on credit) $ 2,500,000

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

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)
Cost of goods sold
Cost of goods manuf.
Gross profit $0
Cost of goods transferred
Cost of goods sold

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, (f) payment of factory payroll, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.

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