[The following information applies to the questions displayed below] Sierra Comp

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[The following information applies to the questions displayed below] Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department. The following information is available regarding its May inventories Raw materials inventory Work in process inventory Finished goods inventory Beginning Inventory S 61,000 419,500 614,000 Ending Inventory $ 70,500 531,000 430,001 The following additional information describes the company's production activities for May Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other overhead cost (Other Accounts 280,000 1,541,000 67,500 credited) Materials used Direct Indirect 180,500 90,000 Labor used Direct Indirect 790,000 751,000 115% Overhead rate as a percent of direct labor Sales (on credit) 5,500,000 The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost

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Answer:

Raw materials (RM) RM-April 30 61000 Indirect material 90000 RM Purchased 280000 Direct material used 180500 RM-31 May 70500 Total 341000 Total 341000 Factory Payroll Factory Payroll 1541000 Indirect labor 751000 DL used 790000 Total 1541000 Total 1541000 Factory Overhead Indirect material 90000 Overhead applied 908500 Indirect labor 751000 Other overhead costs 67500 Goods in Process (GIP) GIP-April 30 419500 Cost of goods manufactured 1767500 DM used 180500 DM used 790000 Overhead applied 908500 GIP-May 31 531000 Finished goods FG-April 30 614000 Cost of goods sold 1951499 Cost of goods manufactured 1767500 FG-May 31 430001 Income Statement (Partial) Sales 5500000 Cost of goods sold 1951499 Gross Profit 3548501

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