/The following information applies to the questions displayed below] Sierra Comp
ID: 2599480 • Letter: #
Question
/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 avalilable regarding its May Inventorles Ending Beginning Invento Raw materials inventory Work in process Inventory Finished goods inventory $ 58,000$60,000 412,500517.000 477.001 619,000 he 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 credited) Matenals used $260.000 1,590.000 44.000 Direct Indirect $172.000 86.000 Labor used Direct Indirect $ 800.000 790.000 15% Overhead rate as a percent of direct labor Sales (on credit) s 5,500.ooo The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.Explanation / Answer
Raw Materials
RM April 30
58000
Indirect Materails
86000
Raw material purchases
260000
Direct Materials
172000
Raw Material 31
60000
Factory Payroll payable
Total PR paid
1590000
Indirect labor
790000
Direct labor used
800000
Factory overhead
Indirect Materials
86000
Overhead applied
920000
Indirect Labor
790000
Other overhead costs
44000
Work in process WIP
WIP April 30
412500
Cost of goods Manufactured
1787500
Direct Material used
172000
Direct Labor used
800000
Overhead applied
920000
WIP May 31
517000
Finished goods FG
FG April 30
619000
Cost of goods sold
1929499
Cost of goods Manufactured
1787500
FG may 31
477001
Income statement (partial)
Sales
5500000
Cost of goods sold
-1929499
Gross profit
3570501
Date
General Journal
Debit
credit
May-31
Raw Material Inventory
260000
Accounts Payable
260000
May-31
Work in process inventory
172000
Raw Material Inventory
172000
May-31
Factory overhead
86000
Raw Material Inventory
86000
May-31
Factory Payroll
1590000
Cash
1590000
May-31
Work in process inventory
800000
Factory Payroll
800000
May-31
Factory overhead
790000
Factory Payroll
790000
May-31
Factory overhead
44000
Other accounts
44000
May-31
Work in process inventory
920000
Factory overhead
920000
May-31
Finished goods inventory
1787500
Goods in process inventory
1787500
May-31
Accounts receivable
5500000
sales
5500000
May-31
cost of goods sold
1929499
Finished goods inventory
1929499
Raw Materials
RM April 30
58000
Indirect Materails
86000
Raw material purchases
260000
Direct Materials
172000
Raw Material 31
60000
Factory Payroll payable
Total PR paid
1590000
Indirect labor
790000
Direct labor used
800000
Factory overhead
Indirect Materials
86000
Overhead applied
920000
Indirect Labor
790000
Other overhead costs
44000
Work in process WIP
WIP April 30
412500
Cost of goods Manufactured
1787500
Direct Material used
172000
Direct Labor used
800000
Overhead applied
920000
WIP May 31
517000
Finished goods FG
FG April 30
619000
Cost of goods sold
1929499
Cost of goods Manufactured
1787500
FG may 31
477001
Income statement (partial)
Sales
5500000
Cost of goods sold
-1929499
Gross profit
3570501
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