Assignment: 20-1 Homework Exercise 20-3 Entries for Flow of Factory Costs for Pr
ID: 2423272 • Letter: A
Question
Assignment: 20-1 Homework
Exercise 20-3
Entries for Flow of Factory Costs for Process Cost System
Domino Foods, Inc., manufactures a sugar product by a continuous process, involving three production departments—Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $335,000, $127,000, and $91,200, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $26,800, and work in process at the end of the period totaled $24,400.
a. Journalize the entries to record the flow of costs into the Refining Department during the period for (1) direct materials, (2) direct labor, and (3) factory overhead.
b. Journalize the entry to record the transfer of production costs to the second department, Sifting.
.
Explanation / Answer
(Being overheads booked)
Working notes:
Other linked Journal enteries
(Being cost transferred to sifting dept.)
working notes:
a) Journal Entries -Refining Department Particulars Dr Cr 1) Direct material $ 3,35,000.00 Creditor or Cash/Bank $ 3,35,000.00 (Being material purchased) 2) Direct Labour $ 1,27,000.00 Creditor or Cash/Bank $ 1,27,000.00 (Being cost of labor booked) 3) Factory Overhead $ 91,200.00 Creditor or Cash/Bank $ 91,200.00 :
(Being overheads booked)
Working notes:
Other linked Journal enteries
WIP $ 5,53,200.00 Direct material $ 3,35,000.00 Direct Labour $ 1,27,000.00 Factory Overhead $ 91,200.00 b) Particulars Dr Cr Sifting Department-Transfer Cost $ 5,55,600.00 Transfer of Production Cost (WIP) $ 5,55,600.00(Being cost transferred to sifting dept.)
working notes:
calculation of transferred cost Opening WIP $ 26,800.00 Add: Direct Material $ 3,35,000.00 Add: Direct Labor $ 1,27,000.00 Add: Direct Overheads $ 91,200.00 Less: Closing WIP $ (24,400.00) Net Cost Transferred $ 5,55,600.00
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