Question
Acme Food Ltd. company makes TWIXIE chocolate bars. The company has two processing departments: Baking and Mixing. In the Baking Department, the raw ingredients for
Acme Food Ltd. company makes TWIXIE chocolate bars. The company has two processing departments: Baking and Mixing. In the Baking Department, the raw ingredients for the one side is made as well as the ingredients for the other side in specially made vats that separate the two sides of the candy bar. In the Mixing Department, the melted chocolate and other ingredients from the Baking Department are carefully packaged into decorative wrapping done by hand. The company uses a process costing system. The following T-accounts show the flow of costs through the two departments in May:
Work in ProcessBaking | |||
Bal. April 1 | 8,000 | Transferred out | 160,000 |
Direct materials | 42,000 | ||
Direct labour | 50,000 | ||
Overhead | 75,000 | ||
Work in ProcessMixing | |||
Bal. April 1 | 4,000 | Transferred out | 240,000 |
Transferred in | 160,000 | ||
Direct labour | 36,000 | ||
Overhead | 45,000 |
Required:
- Prepare journal entries showing the flow of costs through the two processing departments during May.
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