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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

Hardy Company produces 18-ounce boxes of a rolled oat cereal in three departments: mixing, cooking, and packaging. During September, Hardy produced 200,000 boxes with the following costs:

Chapter 6, Problem 31BEB, Basic Cost Flows Hardy Company produces 18-ounce boxes of a rolled oat 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 from 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 to the next process.

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

...
CostsMixing ($)Cooking ($)Packing ($)
Direct material600,500285,500250,000

2.

To determine

Journalize transactions to show transfer cost.

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