Conwell Company manufactures its product, Vitadrink, through two manufacturing p
ID: 2415400 • Letter: C
Question
Conwell Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2014 inventories consisted of Raw Materials $26,000, Work in Process-Mixing $0, Work in Process Packaging $250,000, and Finished Goods $289,000. The beginning inventory for Packaging consisted of 10,000 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 50,000 units were started into production in the Mixing Department and the following transactions were completed 1. purchased 300,000 of raw materials on account. 2. Issued raw materials for production: Mixing $210,000 and Packaging $45,000 3. Incurred labor costs of $258,900 4. Used factory labor: Mixing $182,500 and Packaging $76,400 5. Incurred 810,000 of manufacturing overhead on account. 6. Applied manufacturing overhead on the basis of $24 per machine hour. Machine hours were 28,000 in Mixing and 6,000 in Packaging 7. Transferred 45,000 units from Mixing to Packaging at a cost of $979,000 8. Transferred 53,000 units from Packaging to Finished Goods at a cost of $1,315,000 9. Sold goods costing $1,604,000 for $2,500,000 on account. 2Explanation / Answer
NO ACCOUNT EXPLANATION DEBIT $ CREDIT 4 1 RAW MATERILA INVENTORY 300000 ACCOUNTS PAYBLE 300000 2 WORK IN PROCESS OF MIXING 210000 WORK IN PROCESS OF PACKAGING 45000 RAW MATERIAL INVENTORY 255000 3 LABOUR COST 258900 CASH 258900 4 WORK IN PROCESS OF MIXING 182500 WORK IN PROCESS OF PACKEGING 76400 LABOUR COST 258900 5 MANUFACTURING OVERHEAD 810000 MANUFACTURING OVERHEAD PAYBLE 810000 6 MANUFACTURING OVERHEAD MIXING 672000 MANUFACTURING OVERHEAD PACKAGEING 144000 MANUFACTURING OVERHEAD 816000 7 WORK IN PROCESS OF MIXING 979000 WORK IN PROCESS OF PACKAGING 979000 8 WORK IN PROCESS OF PACKAGEING 1315000 FINISHED GOODS INVENTORY 1315000 9 SALES REVENUE 2500000 COST OF GOODS SOLD 1604000 ACCOUNTS RECEIVABLE 2500000 FINISHED GOODS INVENTORY 1604000