Laffer Lumber produces bagged bark for use in landscaping. Production involves p

Question

Laffer Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations for October.

The company's revenue for the month totaled $440,000 from credit sales, and its cost of goods sold for the month is $256,000.

Prepare summary journal entries dated October 31 to record its October production activities for (1) direct materials usage, (2) direct labor incurred (3) overhead allocation, (4) goods transfer from production to finished goods, and (5) credit sales.
Journal entry worksheet

Record direct materials used in production.

Note: Enter debits before credits.

Record direct labor used in production, but not yet paid.

Record overhead applied to production.

Record the transfer of goods from production to finished goods.

Record the sale of goods on account.

Record the cost of goods sold.

Bagging
Department Direct materials used $ 220,000 Direct labor used $ 38,000 Predetermined overhead rate (based on direct labor) 120 % Goods transferred from bagging to finished goods $ (202,500 )

Explanation / Answer

Journal entry :

Date General journal Debit Credit Work in process 220000     Direct material 220000 (To record direct material used) Work in process 38000     Wages payable 38000 (To record wages incurred) Work in process 45600      Manufacturing overhead (38000*120%) 45600 (To record overhead allocation) Finished goods inventory 202500      Work in process 202500 (To record goods transfered production to finished goods) Account receivable 440000     Sales revenue 440000 (To record credit sales) Cost of goods sold 256000      Finished goods inventory 256000 (To record cost of goods sold)

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.