Problem 18-11 A firm produces its products by a continuous process involving thr
ID: 2370700 • Letter: P
Question
Problem 18-11
A firm produces its products by a continuous process involving three production departments, 1 through 3. Present entries to record the following selected transactions related to production during August:
a. Materials purchased on account, $120,000.
b. Material requisitioned for use in Department 1, $125,700, of which $124,200 entered directly into the product. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
c. Labor cost incurred in Department 1, $195,400, of which $174,000 was used directly in the manufacture of the product. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
d. Factory overhead costs for Department 1 incurred on account, $54,700.
e. Depreciation on machinery in Department 1, $29,200.
f. Expiration of prepaid insurance chargeable to Department 1, $7,000.
g. Factory overhead applied to production, $106,300.
h. Output of Department 1 transferred to Department 2, $362,700.
Hidea. Materials purchased on account, $120,000.
Correct 2 of Item 1 Correct 3 of Item 1 Correct 4 of Item 1 Correct 5 of Item 1
Explanation / Answer
Hi,
Please find the entries as follows:
a)
Raw Materials Inventory Dr. 120000