Question

The company's revenue for the month totaled $950,000 from credit sales, and its cost of goods sold for the month is $540,000. Prepare summary journal entries dated October 31 to record its October production activities for (1) direct material usage, (2) direct labor incurred (3) overhead allocation, (4) goods transfer from production to finished goods, and (5) credit sales.

Answer 1

Step-by-step explanation:

Journal Debit Credit

Oct 31 Work in process inventory 522,000

Raw materials inventory 522,000

Oct 31 Work in process inventory 130,000

Factory payroll payable 130,000

Oct 31 Work in process inventory 227,500

Factory overhead 227,500

Oct 31. Finished goods inventory 595,000

Work in process inventory 595,000

Oct 31 Accounts receivable

950,000

Sales. 950,000

Oct 31 Cost of goods sold 540,000 Finished goods inventory 540,000

Overhead applied = $130,000 × 175% = $227,500