Process Cost Systems

Elf. Bakery Inc. manufactures cookies. Materials are placed in production in the Baking department and after processing are transferred to the packing department, where more materials are added. The finished products emerge from the packing department. There were no inventories of work in process at the beginning or at the end of March. Finished goods inventory at March 1 was 20,000 cases of cookies at a total cost of $300,000. Transactions related to manufacturing operations for march are summarized as follows:

a. materials are purchased on. account, $245,000

b. Materials requisitioned for use: Baking department, $191,500 ($185,000 entered directly into the product); Packing department $40,100 ($36,000 entered directly into the product)

c. Labor costs incurred: Baking department ; $81,200 ($78,000 entered directly into the product; Packing department $67,100 ($65,000 entered directly into the product)

d. Miscellaneous costs and expenses incurred on account: Baking department, $16,800; Packing department, $12,400

e. Depreciation charged on fixed assets: Baking department, $45,200. Packing department, $12,400.

f. Expiration of various prepaid expenses: Baking department, $4,300, Packing department, $800.

g. Factory overhead applied to production, based on machine hours: $75,000 for Baking and $32,000 for Packing

h. Output of baking department:30,000 cases

i. Output of packing department:30,000 cases of cookies

j. Sales on account: 40,000 cases of cookies at $35. Credit to the finished goods account are to be made according to the first-in, first-out method.

Instructions

Journalize the entries to record the transactions, identifying each by letter. Include as an explanation for entry (j) the number of cases and the cost per case of cookies sold.