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Chapter 18: Q28E (page 1015)

Oxford Company had the following transactions in October:

1. Purchased raw materials on account, \(70,000

2. Used materials in production: \)26,000 in the Mixing Department; \(14,000 in the

Packaging Department; \)1,000 in indirect materials

3. Incurred labor costs: \(8,000 in the Mixing Department; \)7,200 in the Packaging

Department; \(2,200 in indirect labor

4. Incurred manufacturing overhead costs: \)3,500 in machinery depreciation; paid

\(2,300 for rent and \)1,590 for utilities

Prepare the journal entries for Oxford Company.

Short Answer

Expert verified

The journal entries to record the purchase of Raw material, uses of raw material, labor cost and manufacturing overhead are shown in step 2.

Step by step solution

01

Step-by-Step Solution:Step 1: Manufacturing Process

The manufacturing process means the process of producing the products. It is done by using the raw material which is converted by applying the conversion cost into the final product.

02

Journal entries to record the transactions

Date

Particulars

Debit ($)

Credit ($)

1.

Raw material

70,000

Account payable

70,000

2.

Work-in-process inventory-Mixing department

26,000

Work-in-process inventory-Packaging department

14,000

Manufacturing overhead

1,000

Raw material

41,000

3.

Work-in-process inventory-Mixing department

8,000

Work-in-process inventory-Packaging department

7,200

Manufacturing overhead

2,200

Wages payable

17,400

4.

Manufacturing overhead

3,500

Accumulated depreciation

3,500

5.

Manufacturing overhead

3,890

Cash (2,300+1,590)

3,890

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Most popular questions from this chapter

Question: What are the four steps in preparing a production cost report?

Question: Spring Fresh produces premium bottled water. Spring Fresh purchases artesian water, stores the water in large tanks, and then runs the water through two processes: filtration and bottling.

During February, the filtration process incurred the following costs in processing

200,000 liters:

Wages of workers operating filtration equipment

$19,950

Manufacturing overhead allocated to filtration

20,050

Water

110,000

Spring Fresh had no beginning Work-in-Process Inventory in the Filtration Department in February and uses the weighted-average method.

Requirements

1. Compute the February conversion costs in the Filtration Department.

2. The Filtration Department completely processed 200,000 liters in February. What was the filtration cost per liter?

Mayhem Electronics makes game consoles in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no Work-in-Process Inventory on March 31. In mid-April, Mayhem Electronics started production on 99,000 game consoles. Of this number, 95,000 game consoles were assembled during April and transferred out to the Programming Department. The April 30 Work-in-Process Inventory in the Assembly Department was 45% of the way through the assembly process. Direct materials costing \(301,950 were placed in production in Assembly during April, direct labor of \)100,960 was assigned, and manufacturing overhead of $136,200 was allocated to that department.

Requirements

1. Prepare a production cost report for the Assembly Department for April. The

company uses the weighted-average method.

2. Prepare a T-account for Work-in-Process Inventory—Assembly to show its activity during April, including the April 30 balance.

Question: The Jimenez Toy Company makes wooden toys. The company uses a process costing system. Arrange the company’s accounts in the order the production costs are most likely to flow, using 1 for the first account, 2 for the second, and so on.

Order

Account

Work-in-process inventory – Packaging

Cost of goods sold

Work-in-process inventory – Cutting

Work-in-process inventory – Finishing

Finished goods inventory

Question: Cadwell manufactures cell phones. The conversion costs to produce cell phones for November are added evenly throughout the process in the Assembly Department. The company uses the weighted-average method. For each of the following separate assumptions, calculate the equivalent units of production for conversion costs in the ending Work-in-Process Inventory for the Assembly Department:

1. 12,000 cell phones were 60% complete

2. 21,000 cell phones were 40% complete
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