Answer Happy

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: Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory The following additional Information describes the company's production activities for May. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Direct labor Direct labor-Cutting Direct labor-Stitching Total factory payroll paid (in cash) Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs Factory Overhead Rates Cutting Stitching Sales WIP - April 30 Direct materials - Cutting Direct labor - Cutting Overhead - Cutting WIP - May 31 WIP - April 30 C of GM-Cutting Direct labor - Stitching Overhead - Stitching WIP - May 31 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. FG - April 30 C of GM-Stitching FG - May 31 $ 72,000 58,800 66,000 Beginning Ending Inventory Inventory 233,500 155,500 253,300 119,480 58,100 46,250 $120,000 26,500 8 (158% of direct materials used) (120% of direct labor used) $1,016,000 25,100 39,750 155,500 $ 25,100 100,400 184,300 Work in Process (WIP) - Cutting 233,500 C of GM - Cutting 26,500 120,480 119,400 Work in Process (WIP) - Stitching 253,300 C of GM - Stitching 169,350 100,400 46,250 Finished Goods (FG) 58,100 Cost of goods sold 524,130 169,350 524,130 535,980