E18-22 Preparing journal entries, posting to T-accounts, making decisions Refer

Question

E18-22 Preparing journal entries, posting to T-accounts, making decisions Refer to your answers from Exercise E18-21. Requirements 1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Blending De Also, prepare the journal entry to recose the costs of the gallons completed and transferred out to the Packaging Depashent. Assume labor costs are accrued and not yet paid. artment. 2. Post the journal entries to the Work-in Process Inventory-Blending T-account. What is the ending balance? 3. What is the average cost per gallon transferred out of the Blending Department into the Packaging Department? Why would the company managers want to know this cost?

Explanation / Answer

Req 1. Journal entries: S.no. Accounts title and explanations Debit $ Credit $ a. Work in process inventory -Blending Dr. 5525     Raw material inventory 5525 b. Work in process inventory -Blending Dr. 1500      Wages payable 1500 c. Work in process inventory -Blending Dr. 2547     Manufacturing Overheads 2547 d. Wor in process Inventory-Packaging Dr. 7930     Work in process-Blending 7930 Req 2. WORK IN PROCESS INVENTORY-BLENDING Balance 0 WIP-Packaging 7,930 Raw material Inv. 5,525 Wages Payable 1,500 Manufacturing Overheads 2,547 Balance 1,642 Req 3. Average cost per Gallon= (0.65+0.57): 1.22 per Gallon The manageer is interested in knowing average cost due to following reasson: * The average cost helps in setting price of the prodiuuct. *The average cost is used in comparison with the previous year cost.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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