Journal Entries for a Manufacturer On December 1 Carmel Valley Production Inc. h
ID: 2566969 • Letter: J
Question
Journal Entries for a Manufacturer On December 1 Carmel Valley Production Inc. had a work in process inventory of 1,200 units that were compete as o mater als an 50% compete as o labor and overhead. December costs o o : Materials. $6,000 Labor ....2,000 2,000 During December the following transactions occurred: a. Purchased materials costing $50,000 on account. b. Placed direct materials costing $49,000 into production c.Incurred production wages totaling $50,500. d. Incurred overhead costs for December: $20,000 Utilities 28,000 (Cash payment) Supplies e. Applied overhead to work in process at a predetermined rate of 125% of direct labor cost. f. Completed and transferred 10,000 units to finished goods. (Hint: You should first compute equivalent units and unit costs. The unit cost should include applied, not actual, factory overhead.) Carmel Valley uses he weighted average cost method. The ending inventory of work in process consisted of 1 000 units that were completed a to materia an 25% compete as t labor and overhead Required: Prepare the journal entries to record the following December transactions 2,000 (use Supplies Inventory)Explanation / Answer
Calculations:
* Costs added during December for labor and overheads = $50500 + $63125 = $113625
Cost of goods completed and transferred = 10000 units x $16.48 = $164800
No. Account Titles and Explanation Debit Credit a. Materials 50000 Accounts payable 50000 (Purchase of materials on account) b. Work in process 49000 Materials 49000 (Direct materials placed into production) c. Work in process 50500 Wages payable 50500 (Production wages incurred) d. Overhead 61000 Accumulated depreciation 20000 Cash 39000 Supplies inventory 2000 (Overhead costs incurred) e. Work in process 63125 Overhead ($50500 x 125%) 63125 (Overheads applied) f. Finished goods 164800 Work in process 164800 (Cost of goods completed and transferred)Related Questions
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