Question:
1. Festive Toy Company manufactures toy trucks. Prepare journal entries to record its following production activities for January.
1. Purchased $40,000 of raw materials on credit.
2. Used $17,000 of direct materials in production.
3. Used $20,500 of indirect materials.
4. Incurred total labor cost of $77,000, which is paid in cash.
5. Used $58,000 of direct labor in production.
6. Used $19,000 of indirect labor.
7. Incurred overhead costs of $22,000 (paid in cash).
8. Applied overhead at 90% of direct labor costs.
9. Transferred completed products with a cost of $137,000 to finished goods inventory.
10. Sold $450,000 of products on credit. Their cost is $150,000.