Comprehensive Problem Major League Bat Company Major League Bat Company manufactures baseball bats. In addition to its work in process inventories, the company maintains inventories of raw materials and finished goods. It uses raw materials as direct materials in production and as indirect materials. Its factory payroll costs include direct labor for production and indirect labor. All materials are added at the beginning of the process, and conversion costs are applied uniformly throughout the production process. Required: You are to maintain records and produce measures of inventories to reflect the July events of this company. The June 30 balances: Raw Materials Inventory, $35,000; Work in Process Inventory, $10,065 ($3,460 of direct materials and $6,605 of conversion); Finished Goods Inventory, $160,000; Sales, $0; Cost of Goods Sold, $0; Factory Payroll Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events a. Purchased raw materials for $195,000 cash (the company uses a perpetual inventory system). b. Used raw materials as follows: direct materials, $61,340; and indirect materials, $18,000. c. Recorded factory payroll payable costs as follows: direct labor, $222,250; and indirect labor, $33,000. d. Paid factory payroll cost of $255,250 with cash (ignore taxes) e. Incurred add itional factory overhead costs of $96,000 paid in cash f. Allocated factory overhead to production at 50% of direct labor costs View transaction list Journal entry worksheet 2 5 6 Record the purchase of raw materials for cash. Note: Enter debits before credits. Transaction General Journal Credit Debit . Journal entry worksheet 2 3 4 5 Record the use of raw materials. Note: Enter debits before credits. Transaction General Journal Debit Credit b. Record entry Clear entry View general journal Journal entry worksheet K 1 3 Record direct and indirect labor costs incurred. Note: Enter debits before credits. Credit Transaction General Journal Debit C. Record entry View general journal Clear entry Journal entry worksheet 3 4 5 Record factory payroll paid in cash. Note: Enter debits before credits. Credit Transaction General Journal Debit d. Record entry Clear entry View general journal Journal entry worksheet K 1 3 Record other overhead paid in cash Note: Enter debits before credits. Credit Transaction General Journal Debit . Record entry Clear entry View general journal 2. Information about the July inventories follows. Use this information with that from part 1 to prepare a process cost summary, assuming the weighted-average method is used. (Round "Cost per EUP" to 2 decimal places.) Units Beginning inventory Started 11,000 units 13,000 units 7,000 units Ending inventory Beginning inventory Materials-Percent 1008 complete Conversion-Percent complete Ending inventory Materials-Percent 708 1008 complete Conversion-Percent 308 complete Total costs to account for: $ 0 $ 0 Unit reconciliation: Units to account for: Total units to account for Total units accounted for: Total units accounted for Equivalent units of prodptcteon (EUP)-weighted average method EUP- Materials Materials EUP- Units % Labor Conversion Total units Cost per equivalent unit of production Materials Conversion Total costs Costs Costs Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) EUP EUP 0 0 Total costs accounted for: Cost per Total cost Cost of units transferred out: EUP EUP Direct materials Conversion Total costs transferred out Cost per Total cost EUP Costs of ending goods in process EUP 0.00 $ $ $ Direct materials 0 Conversion 0.00 0 Total cost of ending goods in process Total costs accounted for 3. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: g. Total costs transferred to finished goods for July. h. Sale of finished goods costing $305,700 for $705,000 in cash. View transaction list Journal entry worksheet