Refer to the Churning Department information for Woodson Dairy in E5-28A.
In E5-28A
Data for the Churning Department for January follows:
Units in beginning Work in Process (WIP) inventory........................................100,000 units
Units started during the month (all direct materials, including cream
and salt, are added at the beginning of the churning process).........................1,500,000 units
Units in ending Work in Process (WIP) inventory (40% of the way
through the process)............................................................................................200,000 units
Cost information is as follows:
WIP-Churning Department balance as of January 1:
Direct material cost included in beginning WIP balance..........................................$110,000
Conversion cost included in beginning WIP balance....................................................24,000
Beginning balance, WIP, January 1...........................................................................$134,000
Manufacturing costs incurred during January:
Direct materials used...............................................................................................$1,730,000
Direct labor.....................................................................................................................10,000
Manufacturing overhead..............................................................................................558,000
Total manufacturing costs entered into production during January.......................$2,298,000
Requirements
1. What journal entry(s) would have been made during the month to record manufacturing costs? (Use Wages Payable as the credit for the direct labor costs.)
2. What journal entry is needed at the end of the month to transfer the cost of the butter out of the Churning Department and into the next department, the Forming Department?
3. Post the journal entries to the Work in Process Inventory-Churning Department T-account.