Chapter $16$ Homework $($i$)$

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Required information

$[$The following information applies to the questions displayed below.$]$

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points

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.

$\backslash$table$[[,\backslash$table$[[$Beginning$],[$Inventory$]],\backslash$table$[[$Ending$],[$Inventory$]]],[$Raw materials inventory,$ $46,000,$$ $54,850],[$Work in process inventory$-$Cutting,$123,500,100,500],[$Work in process inventory$-$Stitching,$143,300,85,300],[$Finished goods inventory,$36,100,24,250]]$

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

$\backslash$table$[[$Direct materials$],[$Raw materials purchased on credit,credit $ $65,000],[$Direct materials used$-$Cutting,$23,750],[$Direct materials used$-$Stitching,ing $0],[$Direct labor$],[$Direct labor$-$Cutting $ $19,600,$$ $19,600],[$Direct labor$-$Stitching $78,400,78,400],[$Factory Overhead $($Actual costs$)],[$Indirect materials used,$ $32,400],[$Indirect labor used,$56,600],[$Other overhead costs,$55,000],[$Factory Overhead Rates$],[$Cutting $150\%$ of$,150\%$ of direct materials used$],[$Stitching $120\%,120\%$ of direct labor used$],[$Sales$,$$ $576,000]]$

Required:

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.

Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department.

$($a$)$ Transferred to work in process$-$Stitching

$($b$)$ Transferred to finished goods

$($c$)$ Cost of goods sold