Sharpe Co. makes organic salsa in two production departments, Cooking and Bottling. Direct materials costs are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company reports the following for a recent month.

1. Prepare journal entries to record 

(a) Direct materials used, 

(b) Direct labor, and 

(c) Overhead applied. 

2. Prepare journal entries to record the costs transferred from 

(a) Cooking to Bottling and 

(b) Bottling to Finished Goods. 

3. Use T-accounts to compute (a) the ending balance of Work in Process Inventory—Cooking and (b) the ending balance of Work in Process Inventory—Bottling.

Transcribed Image Text:

Cooking Bottling Costs transferred from Cooking to Bottling $42,000 Beginning work in process inventory .. $ 0 $ 5,500 Costs transferred from Bottling to finished goods... 67,000 Activity during the month Direct materials $18,000 $ 8,200 Direct labor... 12,000 6,800 Overhead applied 15,000 8,500