Question

shinem (3) I Runchated rw waterials tor 550000 on acensat. (ei Mandf actuning overbead is applied to the aroduct based on inachine hours used in each departinerte Mising department-400 machine hours at $30 per machine hour. Finhhing department-500 machine tours at 520 per machine hour. (t) Urits continy 356,000 were comble1tdin the Mixing Department and were transferred to the Finksine Oepurtnest (e) Units costing 570,000 were completed in the Finishing Depat tment and were transferrod to fonished coods. कh Fhished goods costing 540,000 vere sold on account for 555,000 . the ambunt is entered Donot indent masualy ? ote amset is entered Donet indentmanes?yd No. Accoont Tities and fxplaratlen (s) (Purchate of raw materiali on accond) (b) (To record materias used in peoduction) (c) [To recere parroli fubility] (d) (To asign factory tabor to production) (c) (To assignowhead to pracewes) (f) (Ta record trantlec of units to the Finiking Oepartmend) (a) (fo record transfer of units lo firished gosdi] (ha) (To rerord talr of finibhed eoods en acrouni]) (h)

Answer 1

The student's question is focused on the appropriate accounting entries for transactions involving raw materials purchase, manufacturing overhead application, transfer of costs between departments, and sale of finished goods in a manufacturing company.

Step-by-step explanation:

The questions posted by the student revolve around the costing and accounting entries related to a manufacturing process. To start with, the company purchased raw materials for $50,000 on account, which will be recorded in the journal entries under raw materials inventory and accounts payable. The manufacturing overhead is then applied to the product based on the machine hours used in each department. Specifically, the Mixing Department uses 400 machine hours at a rate of $30 per hour, and the Finishing Department uses 500 machine hours at $20 per hour. These overheads would be allocated to the product costs as part of the work-in-process for each department respectively.

For the units that were completed in the Mixing Department, costing $36,000, and then transferred to the Finishing Department, the accounting entry would move the costs from work-in-process of the Mixing Department to the work-in-process of the Finishing Department. Similarly, when units costing $70,000 were completed in the Finishing Department and transferred to finished goods, the journal entry would reflect this movement from work-in-process of the Finishing Department to the finished goods inventory.

Last, the finished goods that were sold on account for $55,000, with a cost of $40,000, would involve recording the sale and recognizing the cost of goods sold. This would increase revenue and decrease inventory while also reflecting the cost associated with the sale.