Hello, someone posted the answers (below) to my question. But I\'d like someone
ID: 2426270 • Letter: H
Question
Hello, someone posted the answers (below) to my question. But I'd like someone to explain how they arrived at each of the numbers in the journal entries so I can learn how to figure it out on my own later. Thanks in advance for your help.
Problem 4-16 Cost Flows [LO1]
Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache. The perfume goes through two processing departments: Blending and Bottling.
The following incomplete Work in Process account is provided for the Blending Department for March:
The $33,500 beginning inventory in the Blending Department consisted of the following elements: materials, $8,100; direct labor, $3,600; and overhead applied, $21,800.
Costs incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $16,800; and overhead cost applied to production, $106,000.
Prepare journal entries to record the costs incurred in both the Blending Department and Bottling Department during March. (Omit the "$" sign in your response.)
Manufacturing overhead costs for the entire factory were incurred, $626,000. (Credit Accounts Payable and use a single Manufacturing Overhead control account for the entire factory.)
Units that were complete with respect to processing in the Blending Department were transferred to the Bottling Department, $642,000.
Units that were complete with respect to processing in the Bottling Department were transferred to Finished Goods, $710,000.
Expert Answer
Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache. The perfume goes through two processing departments: Blending and Bottling.
The following incomplete Work in Process account is provided for the Blending Department for March:
Explanation / Answer
Work in ProcessBlending March 1 balance 32,200 Completed and transferred to Bottling Department (760000 ounces) 642,000 Materials 146,600 Direct labor 71,200 Overhead 487,000 March 31 balance 95,000 Items General Journal Debit Credit a. Work in process-Blending 146,600 Work in process-Bottling 45,000 Raw materials 191,600 b. Work in process-Bottling 71,200 Work in process-Blending 16,400 Salaries and wages payable 87,600 c. Manufacturing overhead 716,000 Accounts payable 716,000 d. Work in process-Blending 487,000 Work in process-Bottling 113,000 Manufacturing overhead 600,000 e. Work in process-Bottling 642,000 Work in process-Blending 642,000 f. Finished goods 780,000 Work in process-Bottling 780,000 g. Accounts receivable 1,400,000 Sales 1,400,000 Cost of goods sold 670,000 Finished goods 670,000
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