BASIC COST FLOWS
Sabor Company produces 18-ounce boxes of an oat cereal. Sabor uses three departments: Mixing, Cooking, and Packaging. During the month of August, Sabor produced 150,000 boxes with the following costs:
|
|
Mixing Department
|
Cooking Department
|
Packaging Department
|
|
Direct materials
|
$225,000
|
$75,000
|
$60,000
|
|
Direct labor
|
30,000
|
15,000
|
45,000
|
|
Applied overhead
|
45,000
|
22,500
|
67,500
|
Required:
1. Calculate the costs transferred out of each department.
2. Prepare journal entries that reflect these cost transfers.