Conwell Company manufactures its product, Vitadrink, through two manufacturing p

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. 2

Explanation / Answer

Conwell Compnay Journal Entries Sr No Account Title Dr $ Cr $            1 Raw Materials Inventory       300,000.00 Accounts Payable            300,000.00            2 WIP -Mixing       210,000.00 WIP -Packaging         45,000.00 Raw Materials Inventory            255,000.00            3 Direct Labor Wages Expense       258,900.00 Wages Payable            258,900.00            4 WIP -Mixing       182,500.00 WIP -Packaging         76,400.00 Direct Labor Wages Expense            258,900.00            5 Manufacturing Overhead       810,000.00 Accounts Payable            810,000.00            6 WIP -Mixing       672,000.00 WIP -Packaging       144,000.00 Manufacturing Overhead            816,000.00            7 WIP -Mixing            979,000.00 WIP -Packaging       979,000.00            8 WIP -Packaging        1,315,000.00 Finished Goods 1,315,000.00            9 Sales Revenue        2,500,000.00 Accounts Receivable 2,500,000.00 Finished Goods        1,604,000.00 Cost Of Goods Sold 1,604,000.00

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