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, $24,000 Work in Process Inventory, $8,660 ($2,910 of direct materials and $5,750 of conversion) Finished Goods Inventory, $160,000 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 Purchased raw materials for $140,000 cash (the company uses a perpetual inventory system) Used raw materials as follows direct materials, $65,240 and indirect materials, $12,500 Recorded factory wages payable costs as follows direct labor, $208,500 and indirect labor, $27,500 Paid factory payroll cost of $236,000 with cash (ignore taxes) Incurred additional factory overhead costs of $85,000 paid in cash Applied factory overhead to production at 50 of direct labor costs 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 7,500 units Started 16,000 units Ending inventory 10,000 units Beginning inventory MaterialsPercent complete 100 ConversionPercent complete 75 Ending inventory MaterialsPercent complete 100 ConversionPercent complete 40 3 Using the results from part 2 and the available information, make computations and prepare journal entries to record the following Total costs transferred to finished goods for July Sale of finished goods costing $278,200 for $650,000 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 ( Hint Add any underapplied overhead to, or deduct any overapplied overhead from, the cost of goods sold )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 24, 2024

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.

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, $24,000; Work in Process Inventory, $8,660 ($2,910 of direct materials and $5,750 of conversion); Finished Goods Inventory, $160,000; 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.

Purchased raw materials for $140,000 cash (the company uses a perpetual inventory system).
Used raw materials as follows: direct materials, $65,240; and indirect materials, $12,500.
Recorded factory wages payable costs as follows: direct labor, $208,500; and indirect labor, $27,500.
Paid factory payroll cost of $236,000 with cash (ignore taxes).
Incurred additional factory overhead costs of $85,000 paid in cash.
Applied factory overhead to production at 50% of direct labor costs.

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	7,500	units
Started	16,000	units
Ending inventory	10,000	units
Beginning inventory
MaterialsPercent complete	100	%
ConversionPercent complete	75	%
Ending inventory
MaterialsPercent complete	100	%
ConversionPercent complete	40	%

3. Using the results from part 2 and the available information, make computations and prepare journal entries to record the following:

Total costs transferred to finished goods for July.
Sale of finished goods costing $278,200 for $650,000 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. (Hint: Add any underapplied overhead to, or deduct any overapplied overhead from, the cost of goods sold.)