Question

Required information Problem 16-1A Production cost flow and measurement; journal entries LO P1, P2, P3, P4 [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 available regarding its May inventories Raw materials inventory Work in process inventory Finished goods inventory Beginning Ending Inventory Inventory $ 67,000 $ 71,000 419,000 597,000 602,000 569,000 The following additional information describes the company's production activities for May. $ 290,000 1,555,000 15,000 $ Raw materials purchases (on credit) Factory wages cost (paid in cash) Other overhead cost (Other Accounts credited) Materials used Direct Indirect Labor used Direct Indirect Overhead rate as a percent of direct labor 218,000 68,000 $ 780,000 775,000 110%

Answer 1

Raw materials (RM)					Work in process (WIP)
					Opening balance	419000	Transferred (Balancing figure)	1,678,000
Opening balance	67,000	Direct Materials	218,000		DM used	218000
purchases	290,000	Indirect materials	68000		DL used	780,000
					OH applied(780000x110%)	858,000
Closing balance	71,000
					Closing balance	597,000
Factory wages payable					Finished goods (FG)
cash	1,555,000	DL used	780,000		Opening balance	602000	COGS(Balancing figure)	1,711,000
		Indirect labour used	775,000		Transferred	1,678,000
Closing balance	0				Closing balance	569000
Factory overhead					Income statement (partial)
other indirect expenses(Balancing figure)	15000	OH applied	858,000		Sales			3,500,000
Indirect material	68000				cost of goods sold			1,711,000
Indirect labour	775,000				Gross margin			1,789,000
Closing balance	0	0
					Cost of goods transferred			1,678,000
					Cost of goods sold			1,711,000

ANY DOUBTS OR CORRECTIONS REGARDING THE ANSWER?

FEEL FREE TO COMMENT BELOW.