BASIC COST FLOWS Sabor Company produces 18-ounce boxes of an oat cereal. Sabor uses three departments: Mixing, Cooking, and Packaging. During the month of August, Sabor produced 150,000 boxes with the following costs:

Mixing Department Cooking Department Packaging Department Direct materials $225,000 $75,000 $60,000 Direct labor 30,000 15,000 45,000 Applied overhead 45,000 22,500 67,500 Required:

. Calculate the costs transferred out of each department.

. Prepare journal entries that reflect these cost transfers.

Cornerstone Exercise