Question

EA18.

LO 5.5Prepare the journal entry to record the transfer of 3,000 units from the packaging department to finished goods if the material cost per unit is $4 and the conversion cost per unit is $5.50.

Answer 1

The journal entry to record the transfer of 3,000 units from the packaging department to finished goods is given below.

Debit Finished Good Account $ 28,500

Credit Packaging Department Cost Account $ 28,500

Working

Per unit Cost = Conversion cost + Material Cost

= 4 + 5.5 = $ 9.5

Total cost to be transferred = 3000 * 9.5 = 28,500