Parker Laboratories, Inc., produces one of its products in two successive departments. All materi- als are added at the beginning of the process in Department 1. No materials are used in Department 2. Conversion costs are incurred evenly in both departments. August 1, 2019, inventory account balances are as follows:

During August, the following transactions occurred: 

1. Purchased materials on account, \($58,000\). 

2. Placed \($63,300\) (16,000 units) of materials into process in Department 1. 

3. Distributed total payroll costs: \($83,770\) of direct labor to Department 1, \($42,300\) of direct labor to Department 2, and \($19,100\) of indirect labor to Manufacturing Overhead. 

4. Incurred other actual manufacturing overhead costs, \($21,200\). (Credit Other Accounts.) 

5. Applied overhead to the two processing departments: Department 1, \($21,080\), Department 2, \($17,900\). 

6. Transferred 20,000 completed units from Department I to Department 2. The 2,000 units remaining in Department I were 30% completed with respect to conversion costs. 

7. Transferred 15,000 completed units from Department 2 to Finished Goods Inventory. The 8,500 units remaining in Department 2 were 40% completed with respect to conversion costs. 

8. Sold 13,000 units on account at \($24\) per unit. Parker uses weighted average inventory costing for finished goods inventory. 

Required

a. Record the August transactions in general journal form for Department 1 and Department 2.

b. Prepare a product cost report (with its supporting calculations) for Department 1.

c. Prepare a product cost report (with its supporting calculations) for Department 2.

d. Determine the balances remaining in the Materials Inventory account, in each work-in-process account, and in the Finished Goods Inventory account.

Transcribed Image Text:

Materials inventory... Work-in-process-Department 1 (6,000 units, 25% finished) Direct materials. Conversion costs Work-in-process-Department 2 (3,500 units, 35% finished) Finished goods inventory (4,000 units @$12.50). $15,000 11,500 18,750 41,000 50,000