Problem 1:
A manufacturing company produces a product in 2 departments: (1) mixing and (2) finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:
Direct Materials
Mixing Department $20,000
Finishing Department $14,000
(c) Incurred labor costs of $80,000.
(d) Factory labor used:
Mixing Department $48,000
Finishing Department $32,000
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing Department - 600 machine hours at $45 per machine hour
Finishing Department - 500 machine hours at $30 per machine hour
(f) Units costing $66,000 were completed in the Mixing Department & were transferred to the Finishing Department.
(g) Units costing $60,000 were completed in the Finishing Department & were transferred to the finished goods.
(h) Finished goods costing $30,000 were sold on account for $45,000.
Instructions:
Prepare the journal entries to record the preceding transactions for the manufacturing company
