[The following information applies to the questions displayed below.] 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 Raw materials Inventory Work in process inventory Finished goods Inventory Beginning Inventory $ 65,000 400,000 611,000 Ending Inventory $ 74,000 583,000 298,001 The following additional Information describes the company's production activities for May. $ 270,000 1,550,000 94,000 Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor Sales (on credit) $ 189,000 72.000 $ 780,000 770,000 120% $3,500,000 The predetermined overhead rate was computed at the beginning of the year as 120% of direct labor cost. Required: 1. Compute the cost of products transferred from production to finished goods and cost of goods sold. RM - April 30 RM purchases Raw Materials (RM) 65,000 270,000 WIP - April 30 Work in Process (WIP) 400.000 RM- May 31 74.000 WIP - May 31 583,000 Factory Payroll Payable Total Factory PR paid 1,550,000 Finished Goods (FG) 611,000 FG - April 30 FG - May 31 298,0011 Income Statement (partial) Factory Overhead 936,000 Indirect labor Sales Cost of goods sold Gross profit 3.500 000 $ 2876.999 $ 623,001 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, (0 payment of factory payroll, (g) other overhead costs, (h) overhead applied, O goods transferred from production to finished goods, and sale of finished goods View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 May 31 Raw materials inventory Accounts payable 2 May 31 Work in process inventory Raw materials inventory 3 May 31 Factory overhead Raw materials inventory 4 May 31 Work in process inventory Factory payroll payable IN 5 May 31 Factory overhead Factory payroll payable 6 May 31 Factory payroll payable Cash 7 May 31 Factory overhead Other accounts B May 31 Work in process inventory Factory overhead 9 May 31 Finished goods inventory Work in process inventory