Wilbury Company manufactures a nutrient, Everlife, through two manufacturing pro

Question

Wilbury Company manufactures a nutrient, Everlife, through two manufacturing processes: Blending and Packaging. All materials are entered at the beginning of each process. On August 1, 2014, inventories consisted of Raw Materials $5,000, Work in Process—Blending $0, Work in Process—Packaging $3,945, and Finished Goods $7,500. The beginning inventory for Packaging consisted of 500 units, two-fifths complete as to conversion costs and fully complete as to materials. During August, 9,000 units were started into production in Blending, and the following transactions were completed.

1.  

2.  

3.  

4.  

5.  

6.  

7.  

8.  

9.  

Instructions

Journalize the August transactions.

1.  

Purchased $25,000 of raw materials on account.

2.  

Issued raw materials for production: Blending $18,930 and Packaging $9,140.

3.  

Incurred labor costs of $25,770.

4.  

Used factory labor: Blending $15,320 and Packaging $10,450.

5.  

Incurred $36,500 of manufacturing overhead on account.

6.  

Applied manufacturing overhead at the rate of $28 per machine hour. Machine hours were Blending 900 and Packaging 300.

7.  

Transferred 8,200 units from Blending to Packaging at a cost of $44,940.

8.  

Transferred 8,600 units from Packaging to Finished Goods at a cost of $67,490.

9.  

Sold goods costing $62,000 for $90,000 on account.

Explanation / Answer

Journal Entries

Description Debit Credit Raw materials $25,000 To Accounts payable $25,000 Work in progress- Blending 18,930 WIP - Packaging 9,140 To Raw materials inventory $28,070 Factory and wages $25,770 To Factory and wages payable $25,770 WIP $25,770 To Factory and wages - Blending $15,320 To Factory and wages - Packaging 10,450 Manufacturing overhead $36,500 To Accounts payable $36,500 WIP- Blending 25,200 WIP- Pacakaing 8,400 To Manufacturing overhead $33,600 WIP-Packaging $49,940 WIP- Blending $49,940 Finished goods $67,490 To WIP $67,490 Cost of goods sold $62,000 To Finsished goods $62,000

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