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, $38,000; Work in Process Inventory, $10,760 ($3,610 of direct materials and $7,150 of conversion); Finished Goods Inventory, $190,000; 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.

1. Purchased raw materials for $210,000 cash (the company uses a perpetual inventory system).
2. Used raw materials as follows: direct materials, $64,790; and indirect materials, $19,500.
3. Recorded factory payroll payable costs as follows: direct labor, $226,000; and indirect labor, $34,500.
4. Paid factory payroll cost of $260,500 with cash (ignore taxes).
5. Incurred additional factory overhead costs of $99,000 paid in cash.
6. Allocated factory overhead to production at 50% of direct labor costs.

1	a.	Raw materials inventory	210,000
		Cash		210,000
2	b.	Work in process inventory	64,790
		Factory overhead	19,500
		Raw materials inventory		84,290
3	c.	Work in process inventory	226,000
		Factory overhead	34,500
		Factory wages payable		260,500
4	d.	Factory wages payable	260,500
		Cash		260,500
5	e.	Factory overhead	99,000
		Cash		99,000
6	f.	Work in process inventory	113,000
		Factory overhead		113,000

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	12,500	units
Started	16,000	units
Ending inventory	10,000	units
Beginning inventory
MaterialsPercent complete	100	%
ConversionPercent complete	70	%
Ending inventory
MaterialsPercent complete	100	%
ConversionPercent complete	30	%

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 $313,200 for $720,000 in cash.

And

• Record the cost of goods sold.

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. (Add any underapplied overhead to, or deduct any overapplied overhead from, the cost of goods sold.)

Total costs to account for: Cost of beginning work in process $ 10,760 Costs incurred this period Total costs to account for 10,760 0 Unit reconciliation: Units to account for: Beginning work in process inventory - units Units started this period Total units to account for Total units accounted for: Units completed and transferred out Ending work in process - units Total units accounted for Equivalent units of production (EUP) weighted average method EUP- EUP- Materials Units % Materials % Labor Conversion Units completed and transferred out Ending work in process - units Total units Materials Conversion Cost per equivalent unit of production Cost of beginning work in process Costs incurred this period Total costs Costs Costs Equivalent units of production EUP EUP Cost per equivalent unit of production (rounded to 2 decimals) 0 0 Total costs accounted for: Total cost Cost of units transferred out: EUP Cost per EUP Direct materials Conversion Total costs transferred out Costs of ending goods in process EUP Cost per EUP Total cost $ Direct materials 0.00 0 0.00 Conversion 0 Total cost of ending goods in process Total costs accounted for