Deluxe Tire Company produces tires in two processing departments—Fabrication and Packaging. Transactions for the month of July are shown as follows.

1. Direct materials totaling $15,000 are requisitioned and placed into production—$7,000 for the Fabrication department and $8,000 for the Packaging department.

2. Direct labor costs (wages payable) are incurred by each department as follows:

Fabrication ………… $4,500

Packaging…………… $6,700

3. Manufacturing overhead costs are applied to each department as follows

Fabrication ………… $20,000

Packaging…………… $14,000

4. Products with a cost of $22,000 are transferred from the Fabrication department to the Packaging department.

5. Products with a cost of $35,000 are completed and transferred from the Packaging department to the finished goods warehouse.

6. Products with a cost of $31,000 are sold to customers.

 

Required:

a. Prepare journal entries to record each of the previous transactions. 

b. In general, how does the process costing system used here differ from a job costing system?