Comprehensive Problem Major League Bat Company (Static) 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, $25,000; Work in Process Inventory, $8,135 ($2,660 of direct materials and $5,475 of conversion); Finished Goods Inventory, $110,000; Sales, $0; Cost of Goods Sold, $0; Factory Wages Payable, $0; and Factory Overhead, $0. 1. Prepare journal entries to record the following July transactions and events. a. Purchased raw materials for $125,000 cash. b. Used raw materials as follows: direct materials, $52,440, and indirect materials, $10,000. c. Recorded factory wages payable costs as follows: direct labor, $202,250, and indirect labor, $25,000. d. Incurred other actual factory overhead costs of $66,125 paid in cash. e. Applied factory overhead to production at 50% of direct labor costs. 2. Information about the July work in process (WIP) inventory follows. Use this information with that from part 1 to prepare a production cost report, assuming the weighted average method is used. Units Beginning WIP inventory Started 5,000 units 14,000 units Units transferred out 11,000 units Ending WIP inventory 8,000 units Beginning WIP inventory Direct materials-Percent complete Conversion-Percent complete 100% 75% Ending WIP inventory Direct materials-Percent complete 100% Conversion-Percent complete 40% 3. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following: f. Total costs transferred to finished goods for July. g. Sale of finished goods costing $265,700 for $625,000 in cash. 4. Post entries from parts 1 and 3 to the following general ledger accounts. 5. Compute the amount of gross profit from the sales in July. Date June 30 Date June 30 Raw Materials Inventory Debit Finished Goods Inventory Debit Account Number 132 Credit Balance 25,000 Date June 30 Work in Process Inventory Debit Account Number Credit 133 Balance 8,135 Account Number Factory Wages Payable 135 Credit Balance Date Debit Credit 110,000 Account Number 212 Balance Sales Account Number 413 Cost of Goods Sold Account Number 502 Date Debit Credit Balance Date Debit Credit Balance Date Factory Overhead Debit Account Number 540 Credit Balance Unit reconciliation: Units to account for: Total units to account for Units accounted for: Total units accounted for Equivalent units of production (EUP) Equivalent Units of Production Cost per equivalent unit of production Direct Materials Units % Complete Conversion EUP % Complete EUP Direct Materials Conversion Total costs + Equivalent units of production Costs Costs EUP EUP Cost per equivalent unit of production (rounded to 2 decimals) 0 0 Cost Assignment Completed and transferred out Direct materials Conversion Ending work in process Direct materials Conversion Total costs accounted for Cost per EUP Total cost EUP Cost per EUP Total cost EUP $ 0.00 $ 0 $ 0.00 0