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. |
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Purchased $300,000 of raw materials on account. |
| 2. |
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Issued raw materials for production: Mixing $210,000 and Packaging $45,000. |
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Incurred labor costs of $258,900. |
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Used factory labor: Mixing $182,500 and Packaging $76,400. |
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Incurred $810,000 of manufacturing overhead on account. |
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Applied manufacturing overhead on the basis of $24 per machine hour. Machine hours were 28,000 in Mixing and 6,000 in Packaging. |
| 7. |
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Transferred 45,000 units from Mixing to Packaging at a cost of $979,000. |
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Transferred 53,000 units from Packaging to Finished Goods at a cost of $1,315,000. |
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Sold goods costing $1,604,000 for $2,500,000 on account.
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Account Titles and Explanation
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Debit
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Credit
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9.
(To record the sale.)
| (To record the cost of goods sold.) |
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