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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

	Beginning Inventory			Ending Inventory
Raw materials inventory	$	62,000		$	114,000
Work in process inventory		401,500			605,000
Finished goods inventory		638,000			123,001

The following additional information describes the company's production activities for May.

Raw materials purchases (on credit)	$	290,000
Factory payroll cost (paid in cash)		1,539,000
Other overhead cost (Other Accounts credited)		78,000
Materials used
Direct	$	178,000
Indirect		60,000
Labor used
Direct	$	780,000
Indirect		759,000
Overhead rate as a percent of direct labor		115	%
Sales (on credit)	$	5,500,000

The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.

3.

value: 7.50 points

Required information

Required:
1.	Compute the cost of products transferred from production to finished goods and cost of goods sold.

RAW MATERIALS WORK IN PROCESS

FACTORY PAYROLL PAYABLE FINISHED GOODS

FACTORY OVERHEAD INCOME STATEMENT (PARTIAL)

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