I

Required information

Problem $3-5$A $($Algo$)$ Production cost flow and measurement; Journal entries LO P$3,$ P$4$

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

Sierro Compony manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct moterials enter

production at the beginning of the cutting process. The following information is ovailoble regarding its May inventories.

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 $$17,600$

Direct labor Stitching $70,400$

Factory Overhead $($Actual costs$)$

Indirect materials used $\{18,$ebt

Indirect labor used $55,8000$

Other overhead costs $51,$e$00$

Factory Overhead Rates

Cutting. $*150\%$ of direct materials used

Stitching $120\%$ of direct labor used

sales

$$416,000$

Problem $3-5$A $($Algo$)$ Part $1$

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.