Pleni Company produces 18-ounce boxes of a wheat cereal in three departments: Mi
ID: 2513711 • Letter: P
Question
Pleni Company produces 18-ounce boxes of a wheat cereal in three departments: Mixing, Cooking, and Packaging. During August, Pleni produced 125,000 boxes with the following costs:
Mixing
Cooking
Packaging
Department
Department
Department
Required:
Prepare journal entries that reflect these cost transfers.
Insurance Expense
1. Calculate the costs transferred out of each department.
(a) Costs transferred out of the Mixing Department:
(b) Costs transferred out of the Cooking Department:
(c) Costs transferred out of the Packaging Department:
Prepare journal entries on Aug. 31 that reflect these cost transfers. Refer to the Chart of Accounts for the exact wording of account titles.
Mixing
Cooking
Packaging
Department
Department
Department
Direct materials $412,500 $187,500 $165,000 Direct labor 60,000 37,500 90,000 Applied overhead 75,000 41,250 116,250Explanation / Answer
1a Costs transferred out of the Mixing Department=412500+60000+75000= $547500 b Costs transferred out of the Cooking Department=547500+187500+37500+41250= $813750 c Costs transferred out of the Packaging Department=813750+165000+90000+116250= $1185000 2 31-Aug Work in Process-Cooking 547500 Work in Process-Mixing 547500 31-Aug Work in Process-Packaging 813750 Work in Process-Cooking 813750 31-Aug Finished Goods 1185000 Work in Process-Packaging 1185000