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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Basic Cost Flows

Gardner Company produces 18-ounce boxes of a wheat cereal in three departments: mixing, cooking, and packaging. During August, Gardner produced 250,000 boxes with the following costs:

Chapter 6, Problem 21BEA, Basic Cost Flows Gardner Company produces 18-ounce boxes of a wheat cereal in three departments:

Required:

  1. 1. Calculate the costs transferred out of each department.
  2. 2. Prepare journal entries that reflect these cost transfers.

1.

To determine

Identify the costs transferred out of each department.

Explanation

Transfer-in Cost:

A cost transferred from the previous process to the next process is known as transfer-in cost. In other words transfer-in cost is a cost which acts as a raw material cost in the next process.

Prepare table to show calculation of cost transferred out of each department as given below:

...
CostsMixing ($)Cooking ($)Packing ($)
Direct material82,500379,500330,000

2.

To determine

Journalize the transactions.

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