Cost Flows Through Journal Entries The Mixing Department per

Cost Flows Through Journal Entries

The Mixing Department performs a series of processes in which a fluid chemical is concentrated. Records indicate that the Mixing Department has been charged with $75,000 of direct labor costs. The manufacturing overhead rate is 170% of direct labor costs. Beginning work in process was $255,000, and ending work in process totaled $54,000. One half of this period\'s completed products is sold on account at a price equal to 150% of its cost.

Prepare journal entries to record (1) various costs charged to the Mixing Department this period, (2) transfer of this period\'s completed product, and (3) sale of one-half of this period\'s production.

Cost Flows Through Journal Entries The Mixing Department performs a series of processes in which a fluid chemical is concentrated. Records indicate that the Mixing Department has been charged with $75,000 of direct labor costs. The manufacturing overhead rate is 170% of direct labor costs. Beginning work in process was $255,000, and ending work in process totaled $54,000. One half of this period\'s completed products is sold on account at a price equal to 150% of its cost. Prepare journal entries to record (1) various costs charged to the Mixing Department this period, (2) transfer of this period\'s completed product, and (3) sale of one-half of this period\'s production General Journal Ref Description Debit Credit To record direct labor costs. To record manufacturing overhead To record completed production To record cost of goods sold To record this period\'s sales.

Solution

DR CR Work in Progress Mixing Department 75000 Wages Payable 75000 To Record Direct Labor cost Work in Progress Mixing Department 127500 Manufacturing Overhead (75000*170%) 127500 To Record Manufacturing Overhead Finished Goods 403500 Work in Progress Mixing Department 403500 (255000+75000+127500-54000) Cost of Goods sold 201750 Finished Goods 201750 (403500*1/2) Cash 302625 Sales 302625 (To Record Sales) (201750*150%)