JOURNAL ENTRIES, COST OF ENDING INVENTORIES Baxter Company has two processing departments: assembly and finishing. A predetermined overhead rate of $10 per direct labor hour is used to assign overhead to production. The company experienced the following operating activity for April:
a. Issued materials to assembly, $24,000.
b. Incurred direct labor cost: assembly, 500 hours at $9.20 per hour; finishing, 400 hours at $8 per hour.
c. Applied overhead to production.
d. Transferred goods to finishing, $32,500.
e. Transferred goods to finished goods warehouse, $20,500.
f. Incurred actual overhead, $10,000.
Required:
1. Prepare the required journal entries for the preceding transactions.
2. Assuming assembly and finishing have no beginning work in process inventories, determine the cost of each department’s ending work in process inventories.