Larney Corporation uses process costing. A number of transactions that occurred

Question

Larney Corporation uses process costing. A number of transactions that occurred in June are listed below. Raw materials that cost $40.200 are withdrawn from the storeroom for use in the Mixing Department. Ail of these raw materials are classified as direct materials. Direct labor costs of $38.200 are incurred. but not yet paid. in the Mixing Department. Manufacturing overhead of $44.200 is applied in the Mixing Department using the department's predetermined overhead rate. Units with a carrying cost of $114.200 finish processing in the Mixing Department and are transferred to the Drying Department for further processing. Units with a carrying cost of $145.700 finish processing in the Drying Department, the final step in the production process. and are transferred to the finished goods warehouse. Finished goods with a carrying cost of $140.200 are sold.

Explanation / Answer

Event General journal Debit Credit 1 work in process - mixing dept      40,200 Raw materials      40,200 2 work in process - Mixing dept      38,200 Payroll/wages-payable      38,200 3 Work in Process - Mixing dept.      44,200 Manufacturing Overheads      44,200 4 Work in Process - Drying dept.    114,200 Work in Process - Mixing dept.    114,200 5 Finished-Goods inventory    145,700 Work in Process - Drying dept.    145,700 6 Cost of goods sold    140,200 Finished-Goods inventory    140,200

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