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Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache. The perfume goes through two processing departments: Blending and Bottling. |
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The following incomplete Work in Process account is provided for the Blending Department for March: |
| Work in ProcessAf?cAc‚¬”Blending |
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| March 1 balance | 34,100 | Completed and transferred to Bottling (760,000 ounces) |
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| Materials | 141,600 | |||
| Direct labor | 67,200 | |||
| Overhead | 487,000 | |||
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| March 31 balance | ? | |||
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The $34,100 beginning inventory in the Blending Department consisted of the following elements: materials, $8,500; direct labor, $4,400; and overhead applied, $21,200. |
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Costs incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $16,600; and overhead cost applied to production, $111,000. |
| Required: |
| 1. |
Prepare journal entries to record the costs incurred in both the Blending Department and Bottling Department during March. (Omit the “$” sign in your response.) |
| a. | Raw materials were issued for use in production. |
| b. | Direct labor costs were incurred. |
| c. |
Manufacturing overhead costs for the entire factory were incurred, $696,000. (Credit Accounts Payable and use a single Manufacturing Overhead control account for the entire factory.) |
| d. | Manufacturing overhead was applied to production using a predetermined overhead rate. |
| e. |
Units that were complete with respect to processing in the Blending Department were transferred to the Bottling Department, $662,000. |
| f. |
Units that were complete with respect to processing in the Bottling Department were transferred to Finished Goods, $790,000. |
| g. | Completed units were sold on account for $1,430,000. The cost of goods sold was $630,000. |