Major League Bat Company manufactures baseball bats. In addltion to its work in process Inventorles, the company maintains inventorles of raw materials and finished goods. It uses raw materlals as direct materlals in production and as indirect materlals. Its factory payroll costs include direct labor for production and indirect labor. All materlals are added at the beginning of the process, and conversion costs are applied unlformly throughout the production process. Required: You are to maintain records and produce measures of Inventorles to reflect the July events of this company. The June 30 balances: Raw Materlals Inventory. \$25,000; Work in Process Inventory, $8,385 (\$2,960 of direct materlals and $5,425 of conversion); Finished Goods Inventory, \$170,000; Sales, \$0; Cost of Goods Sold, \$0; Factory Payroll Payable, \$0; and Factory Overhead, \$0. 1. Prepare journal entrles to record the following July transactions and events. a. Purchased raw materlals for $145,000 cash. b. Used raw materlals as follows: direct materlals, $72,040; and indirect materlals, $13,000. c. Recorded factory wages payable costs as follows: direct labor, $209,750; and Indlrect labor, $28,000. d. Incurred other actual factory overhead costs of $63,875 pald in cash. e. Applied factory overhead to productlon 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 productlon cost report, assuming the weighted average method is used. 3. Using the results from part 2 and the avallable information, make computations and prepare journal entrles to record the following: f. Total costs transferred to finished goods for July. g. Sale of finished goods costing $280,700 for $655,000 in cash. 4. Post entrles from parts 1 and 3 to the following general ledger accounts. 5. Compute the amount of gross profit from the sales in July. 1 Record the purchase of raw materials for cash. 2 Record the use of direct materials. 3 Record the use of indirect materials. 4 Record the direct labor cost incurred, but not yet paid. 5 Record the indirect labor cost incurred, but not yet paid. 6. Record other overhead paid in cash. 7 Record overhead applied at 50% of direct labor. Note : = joumal entry has been entered \begin{tabular}{|l|} \hline Credit \\ \hline \\ \hline \\ \hline \\ \hline \\ \hline \end{tabular} Record entry Clear entry Vew general Journal Unit reconciliation: Equivalent units of production (EUP) Equivalent Units of Production \begin{tabular}{|l|c|c|c|c|} \hline \multirow{3}{*}{ Units } & \multicolumn{3}{|c|}{ Direct Materials } & \multicolumn{2}{c|}{ Conversion } \\ \cline { 2 - 6 } & % Complete & EUP & % Complete & EUP \\ \hline & & & & \\ \hline & & & & \\ \hline \end{tabular} Cost per equivalent unit of production Total costs - Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Cost Assignment \begin{tabular}{|l|l|l|l|l|} \hline Completed and transferred out & EUP & Cost per EUP & Total cost & \\ \hline Direct materials & & & & \\ \hline Conversion & & & & \\ \hline & EUP & Cost per EUP & Total cost & \\ \hline Ending work in process & & & & \\ \hline Direct materials & & & & \\ \hline Conversion & & & & \\ \hline & & & & \\ \hline \end{tabular} 1 Record the transfer of goods to Finished Goods Inventory. 2 Record sale of finished goods for cash. 3 Record the cost of goods sold. Note: = joumal entry has been entered Compute the amount of gross profit from the sales in July
