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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entries for materials cost flows in a process cost system

The Hershey Company manufactures chocolate confectionery products. The three largest raw materials are cocoa, sugar, and dehydrated milk. These raw materials first go into the Blending Department. The blended product is then sent to the Molding Department, where the bars of candy are formed. The candy is then sent to the Packing Department, where the bars are wrapped and boxed. The boxed candy is then sent to the distribution center, where it is eventually sold to food brokers and retailers.

Show the accounts debited and credited for each of the following business events:

a. Materials used by the Blending Department

b. Transfer of blended product to the Molding Department

c. Transfer of chocolate to the Packing Department

d. Transfer of boxed chocolate to the distribution center

e. Sale of boxed chocolate

(a)

To determine

Process costs

It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.

To Prepare: The journal entry to record raw materials used by the blending department of Company H.

Explanation

Prepare the journal entry to record raw materials used by the blending department of Company H as shown below:

Account titles and Explanation Debit Credit
Work in Process - Blending Department XXX
 Materials - Cocoa XXX
 Materials - Sugar XXX
 Materials - Dehydrated Milk XXX
(To record raw materials used by blendin...

(b)

To determine

To Prepare: The journal entry to record products transferred from blending department to molding department of Company H.

(c)

To determine

To Prepare: The journal entry to record products transferred from molding department to packing department of Company H.

(d)

To determine

To Prepare: The journal entry to record products transferred of chocolate boxes from molding department to packing department of Company H.

(e)

To determine

To Prepare: The journal entry to record sale of chocolate boxes for Company H.

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