Question

Nature's Way Inc., keeps one of its production facilities busy making a perfume called Essence. The perfume goes through two processing department: blending and bottling. The following incomplete Work in Process account is provided for the blending process during March. Units are in ounces. 1. Prepare the required journal entries for the preceding transactions. a. Issued materials: to blending $147,600, to bottling $45,000. Date Account Titles and Explanation Ref Debit Credit b. Incurred direct labor cost: to blending $73,200, to bottling $17,000. Date Account Titles and Explanation Ref Debit Credit c. Manufacturing overhead costs for the entire factory was incurred, S140,000. (credit accounts payable ) Date Account Titles and Explanation Ref Debit Credit d. Manufacturing overhead was applied to production based on a predetermined overhead rate of 150% of direct labor cost. (Charge each process - blending and bottling) Date Account Titles and Explanation Ref Debit Credit

Answer 1

Date	Account titles and Explanation	Debit	Credit
Mar. 31	Work - In Process- Blending	$147,600
	Work - In Process- Bottling	$45,000
	Raw Materials                     [$147,600 + $45,000]		$192,600
	(To record usage of raw material)
Date	Account titles and Explanation	Debit	Credit
Mar. 31	Work - In Process- Blending	$73,200
	Work - In Process- Bottling	$17,000
	Salaries and Wages payable     [$73,200 + $17,000]		$90,200
	(To record usage of labor)
Date	Account titles and Explanation	Debit	Credit
Mar. 31	Manufacturing overhead	$140,000
	Accounts Payable		$140,000
	(To record incurred manufacturing overhead)
Date	Account titles and Explanation	Debit	Credit
Mar. 31	Work - In Process- Blending     [Labor cost x 150% = $73,200 x 150%]	$109,800
	Work - In Process- Bottling       [Labor cost x 150% = $17,000 x 150%]	$25,500
	Manufacturing overhead            [$109,800 + $25,500]		$135,300
	(To apply overhead to work-in process)