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.
Ending
Inventory
Beginning
Inventory
Raw materials inventory
$ 106,000
$ 128,650
Work in process inventory-Cutting
243,500
160,500
Work in process inventory-Stitching
263,300
122,500
Finished goods inventory
60,100
48,250
The following additional information describes the company's production activities for May.
Direct materials
Raw materials purchased on credit
$ 125,000
Direct materials used-Cutting
26,750
Direct materials used-Stitching
0
Direct labor
Direct labor-Cutting
$ 25,600
Direct labor-Stitching
102,400
Factory Overhead (Actual costs)
Indirect materials used
$ 75,600
Indirect labor used
59,000
Other overhead costs
67,000
Factory Overhead Rates
Cutting
150% of direct materials used
Stitching
120% of direct labor used
Sales
$ 1,056,000