Question

Fast-Flow Paints produces mixer base paint through a two-stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journaize each event if appropriate: if not provide a short narrative reason as to why you choose not to yournalize the action. Nelson, the production manager, accepts an order to continue processing the current run of mixer base paint. If an amount ok does not require an entry, leave it blank. a. Materials worth $27,000.00 are withdrawn from raw materials inventory of this amount, $25,500.00 will be issued to the Mixing Department and the balance will be issued to the Maintenance Department to be used on production line machines b. Nelson calculates that inbor for the period is $12,500.00 of this amount, 51,750.00 is for maintenance and indirect labor, The remainder is directly associated with mixing. 1 C. Nelson, who is paid a salary but eam about $35.00/hour, spends 1 hour inspecting the production line Nelson's inspection of the assembly line is chargeable to production. As a manager of a production unit it will be incorporated in the cost of production through the allocation of overhead

Answer 1

Solution a & b:

Journal Entries
Event	Particulars	Debit	Credit
a	Work In Process - Mixing Dr	$25,500.00
	Manufacturing overhead Dr	$1,500.00
	To Raw materials inventory		$27,000.00
	(To record use of material)
b	Work In Process - Mixing Dr	$10,750.00
	Manufacturing overhead Dr	$1,750.00
	To Factory wages payable		$12,500.00
	(To record labor cost incurred)

Solution c:

Nelson inspection of assembly line is not chargeable to production. As a manager of a production unit it will be incorporated in the cost of production through allocation of overhead.