Question
Fire Out Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On
Fire Out Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2017, inventories consisted of Raw Materials $27,300, Work in ProcessMixing $0, Work in ProcessPackaging $253,000, and Finished Goods $295,000. The beginning inventory for Packaging consisted of 14,900 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 52,200 units were started into production in the Mixing Department and the following transactions were completed.
1. | Purchased $301,000 of raw materials on account. | |
2. | Issued raw materials for production: Mixing $213,200 and Packaging $47,300. | |
3. | Incurred labor costs of $286,700. | |
4. | Used factory labor: Mixing $187,300 and Packaging $99,400. | |
5. | Incurred $1,033,500 of manufacturing overhead on account. | |
6. | Applied manufacturing overhead on the basis of $25 per machine hour. Machine hours were 30,800 in Mixing and 9,000 in Packaging. | |
7. | Transferred 46,200 units from Mixing to Packaging at a cost of $982,000. | |
8. | Transferred 57,800 units from Packaging to Finished Goods at a cost of $1,316,000. | |
9. | Sold goods costing $1,645,000 for $2,502,000 on account. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started