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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 flow of factory costs for process cost system

Domino Foods, Inc., manufactures a sugar product by a continuous process involving three production departments—Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department. Refining, were $400,000, $150,000, and $100,000, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $40,000, and work in process at the end of the period totaled $35,000.

Journalize the entries to record (a) the flow of costs into the Refining Department during the period for (1) direct materials.,(2) direct labor, and (3) factory overhead and to record (b) the transfer of production costs to the second department, Sifting.

(a.1)

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 flow of costs into refining department during the period for direct materials of Incorporation DF.

Explanation

Prepare the journal entry to record flow of costs into refining department during the period for direct materials of Incorporation DF as shown below:

Account titles and Explanation Debit Credit
Work in process - Refining department $400,000
 Raw materials

(2)

To determine

To Prepare: The journal entry to record flow of costs into refining department during the period for direct labor of Incorporation DF.

(3)

To determine

To Prepare: The journal entry to record flow of costs into refining department during the period for factory overhead of Incorporation DF.

(b)

To determine

To Prepare: Thejournal entry to record production costs from refining department to shifting department of Incorporation DF.

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