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:

MixingCookingPackaging

DepartmentDepartmentDepartment

Direct materials............$825,000.............$379,500...................$330,000

Direct labor..................120,000................75,000.....................180,000

Applied overhead...........225,000................82,500.....................332,500

Required:

1. Calculate the costs transferred out of each department.

2. Prepare journal entries that reflect these cost transfers.