Conwell Company manufactures its product, Vitadrink, through two manufacturing p
ID: 2450251 • 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 $25,100, Work in Process—Mixing $0, Work in Process—Packaging $254,600, and Finished Goods $293,700. The beginning inventory for Packaging consisted of 15,000 units that were 55% complete as to conversion costs and fully complete as to materials. During October, 49,100 units were started into production in the Mixing Department and the following transactions were completed.
1. Purchased $303,000 of raw materials on account.
2. Issued raw materials for production: Mixing $210,520 and Packaging $49,400.
3. Incurred labor costs of $245,400.
4. Used factory labor: Mixing $189,200 and Packaging $56,200.
5. Incurred $794,100 of manufacturing overhead on account.
6. Applied manufacturing overhead on the basis of $22 per machine hour. Machine hours were 27,400 in Mixing and 8,800 in Packaging.
7. Transferred 41,360 units from Mixing to Packaging at a cost of $975,120.
8. Transferred 54,730 units from Packaging to Finished Goods at a cost of $1,317,370.
9. Sold goods costing $1,606,400 for $2,500,950 on account.
Journalize the October transactions.
Explanation / Answer
JV for October Transactions Account Title Dr $ Cr $ 1 Raw Materials Inventory 303,000 Accounts Payable 303,000 2 Raw Materials Inventory 259,920 WIP -Mixing 210,520 WIP-Packaging 49,400 (raw materials issued) 3 Wages Payable 245,400 Wages Expense 245,400 4 Wages Expense 245,400 WIP -Mixing 189,200 WIP-Packaging 56,200 (Direct labor cost charged) 5 Manufacturing Overhead Expenses 794,100 Accounts Payable 794,100 Manufacturing Overhead Expenses 794,100 Manufacturing OH Control A/C 794,100 6 Manufacturing OH Control A/C 796,400 WIP -Mixing 602,800 WIP-Packaging 193,600 (OH applied @$22 per hr) Manufacturing OH Control A/C 2,300 Cost Of Goods Sold 2,300 (Credit of overapplied OH to COGS) 7 WIP -Mixing 975,120 WIP -Packagong -Transfer from Mixing 975,120 (transfer of 41360 units from mixing to packaging) 8 WIP-Packaging 1,317,370 Finished Goods Inventory 1,317,370 9 Finished Goods Inventory 1,606,400 Cost Of Goods Sold 1,606,400 Sales 2,500,950 Accounts Receivable 2,500,950