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, 2020, inventories consisted of Raw Materials $27,100, Work in ProcessMixing $0, Work in ProcessPackaging $251,000, and Finished Goods $292,700. The beginning inventory for Packaging consisted of 13,400 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 54,700 units were started into production in the Mixing Department and the following transactions were completed.
1. | Purchased $303,000 of raw materials on account. | |
2. | Issued raw materials for production: Mixing $213,500 and Packaging $47,500. | |
3. | Incurred labor costs of $283,800. | |
4. | Used factory labor: Mixing $184,900 and Packaging $98,900. | |
5. | Incurred $959,300 of manufacturing overhead on account. | |
6. | Applied manufacturing overhead on the basis of $24 per machine hour. Machine hours were 29,800 in Mixing and 8,900 in Packaging. | |
7. | Transferred 49,500 units from Mixing to Packaging at a cost of $982,900. | |
8. | Transferred 55,500 units from Packaging to Finished Goods at a cost of $1,320,000. | |
9. | Sold goods costing $1,645,000 for $2,502,000 on account. |
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