Question

Fire Out Company manufactures its product, Vitadrink, through two manufacturing processes: Mixing and Packaging. All materials are entered at the beginning of each process. On October 1, 2017, inventories consisted of Raw Materials $27,100, Work in Process-Mixing $0, Work in Process-Packaging $253,000, and Finished Goods $292,500. The beginning inventory for Packaging consisted of 12,800 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 53,100 units were started into production in the Mixing Department and the following transactions were completed. 1. Purchased $301,400 of raw materials on account. 2 Issued raw materials for production: Mixing $213,500 and Packaging $49,400. 3. Incurred labor costs of $283,900. 4. Used factory labor: Mixing $185,200 and Packaging $98,700. 5. Incurred $970,500 of manufacturing overhead on account. Applied manufacturing overhead on the basis of $25 per machine hour. Machine hours were 30,100 in Mixing and 7,900 in Packaging. 7. Transferred 47,100 units from Mixing to Packaging at a cost of $983,300. 8. 9. Transferred 57,600 units from Packaging to Finished Goods at a cost of $1,316,000. Sold goods costing $1,643,000 for $2,503,000 on account.

Answer 1

No.	Account titles and explanation	Debit	Credit
1.	Raw materials inventory	$301400
	Accounts payable		$301400
	(To record raw materials inventory purchased on account)
2.	Work in process- Mixing	$213500
	Work in process- Packaging	$49400
	Raw materials inventory (213500+49400)		$262900
	(To record raw materials used in production)
3.	Factory labor	$283900
	Wages payable		$283900
	(To record labor costs incurred)
4.	Work in process- Mixing	$185200
	Work in process- Packaging	$98700
	Factory labor (185200+98700)		$283900
	(To record factory labor used)
5.	Manufacturing overhead	$970500
	Accounts payable		$970500
	(To record manufacturing overhead incurred)
6.	Work in process- Mixing (30100*$25)	$752500
	Work in process- Packaging (7900*$25)	$197500
	Manufacturing overhead (752500+197500)		$950000
	(To record manufacturing overhead applied)
7.	Work in process- Packaging	$983300
	Work in process- Mixing		$983300
	(To record transferred units from mixing to packaging)
8.	Finished goods	$1316000
	Work in process- Packaging		$1316000
	(To record transferred units from packaging to finished goods)
9.	Accounts receivable	$2503000
	Sales		$2503000
	(To record the sale)
	Cost of goods sold	$1643000
	Finished goods		$1643000
	(To record the cost of goods sold)