Assignment
Fryer's Choice produces a specially blended vegetable oil widely used in restaurant deep fryers. The blending process creates a cooking oil that can be heated to a high temperature, but does not smoke or smell. The oil is produced in two departments: Blending and Bottling. Raw materials are introduced at various points in the Blending Department.
The following incomplete Work in Process T-account is available for the Blending Department for March:
The March 1 beginning inventory in the Blending Department consists of the following cost elements: raw materials, $25,000; direct labour, $4,000; and overhead, $9,000.
Costs incurred during March in the Bottling Department were materials used, $115,000; direct labour, $18,000; and overhead cost applied to production, $42,000. The company uses the weighted-average method in its process costing.
Required:
1. Prepare journal entries to record the cost incurred in both the Blending Department and the Bottling Department during March. Key your entries to the items (a) through (f) below:
a. Raw materials were issued for use in production
b. Direct labour costs were incurred.
c. Manufacturing overhead costs for the entire factory were incurred: $225,000. (Hint: Credit Accounts Payable.)
d. Manufacturing overhead cost was applied to production using a predetermined overhead rate.
e. Units that were complete with respect to processing in the Bottling Department were transferred to finished goods: $950,000.
f. Completed units were sold on account: $1,500,000. The cost of goods sold was $890,000.
2. Post the journal entries from requirement 1 above to T-accounts. The following account balances existed at the beginning of March. (Note: The beginning balance in the Blending Department's Work in Process account is given above.)
After posting the entries to the T-accounts, find the ending balance in the inventory accounts and the manufacturing overhead accounts.
3. Prepare a production report for the Blending Department for March. (Round "Cost per equivalent unit" answers to 2 decimal places.)
4.- Prepare the journal entry to record the transfer of finished goods from the Blending Department to the Bottling Department and post to the appropriate T-accounts prepared in requirement 2 above.
Attachment:- Assignment_Cost_Accounting.rar