Question

Problem 6-15 Comprehensive Process Costing Problem (LO1, LO2, LO3, LO4, L05) Fryer's Choice produces a specially blended vegetable oil widely used in restaurant deep fryers. The blending process creates a cooking oil that can be heated to a high temperature, but does not smoke or smell. The oil is produced in two departments: Blending and Bottling. Raw materials are introduced at various points in the Blending Department. The following incomplete Work in Process T-account is available for the Blending Department for March: Work in Process-Blending Completed and transferred to Bottling ( ? litres) $??? March 1 balance (20,000 litres; materials 100% complete; labour and overhead 90% complete) March costs added: Oils (390,000 litres) Direct labour Overhead $38,000 495,000 72,000 181,000 March 31 inventory (40,000 litres; materials 75% complete, labour and overhead 25% complete) $??? The March 1 beginning inventory in the Blending Department consists of the following cost elements: raw materials, $25,000; direct labour, $4,000; and overhead, $9,000. Costs incurred during March in the Bottling Department were materials used, $115,000; direct labour, $18,000; and overhead cost applied to production, $42,000. The company uses the weighted average method in its process costing. Required: 1. Prepare journal entries to record the cost incurred in both the Blending Department and the Bottling Department during March. Key your entries to the items (a) through (f) below: a. Raw materials were issued for use in production b. Direct labour costs were incurred. c. Manufacturing overhead costs for the entire factory were incurred: $225,000. (Hint: Credit Accounts Payable.) ost was applied to production using a predetermined overhead rate. e. Units that were complete with respect to processing in the Bottling Department were transferred to finished goods: $950,000. f Completed units were sold on account: $1,500,000. The cost of goods sold was $890,000. View transaction list Journal entry worksheet 2 3 4 5 6 7 8 Raw materials were issued for use in production Note: Enter debits before credits. Transaction General Journal Debit Credit

Answer 1

Refer the below images for the above asked questions, in a detailed way of solution.

Solution: Devenement : journal entries particulars Credit Work in process - Blending Alc or Work in process - Bottling Alcor To Raw materials Debit $ 495000 $ 115000 & 616000 Work in process - Blending Atc Dr Work in process - Bottling Alcor so salaries & wages payable $ 12000 S 18000 $ 90000 $225000 Manufacturing overhead alle or To Accounts payable $225000 $19000 Work in TO process - Blanding Alc. Dr Manufacturing overhead $181000 $ 42000 Work in o process - Bottling Alo Dr Manufacturing overhead $ 42000 $950ooo garished goods Alcor To work in process - Bottleng тоото f Accounts to Receivable ale or Sales $ 150oooo $ 1500000 & 890000 cost of To goods Sold Ale or finished goods $ 890000

pr Requirement : Dr worse in process - Bottling or Bal. $ 65000 ce ajoooo 6) 115000 (b) 18000 ed) 42000 part 4 740000 work in process - Blending or Bal- 38000 I part 4 740000 (a) 495000 (b) 72000 (d) 181000 За: чGooo Bal. 3oooo goods or or (c) Manufacturing 22500o overhead - Cy ar (d) 181000 p r Finished Bal 20000 (e) 950ooo 890000 (d) 42000 Bal. 8000D Bal 2000 ar or Accounts payable cri Daw Materials or 681000 (a) 61oooo Bol. 296000 Ball- 71000 or salaries Sales & wages payable cr (b) 90000 (A) S 00000 Deceivable in .pr Goods Sold cr. p Accounts () 1500 000 cost of (f) 890000

Requirement : production Department Report - Blending Quantity Schedule 20000 thits to be accounted for World in process, March Started into production Total units 390000 410000 Equivalent units (EU) Labor overhead X particolars Material 370000 370000 370000 30000 370000 10000 10000 units accounted for os follows: Transferred to Bottling work in process March 31 Toral chits y eagoivalent ohits of production 40000 380000 410000 410000 400000 400000 380000 38.000 38.000 * Material labor overhead particolars $28000 $4000 $9000 costs per equivalent unit: Total cost cost to be accounted for work in process March 1 $38000 Cost added by blending department **7000 a $748000 Total cost ca $726000 Equivalent units of production $ 495000 $72,000 $181000 $520000 $76000 $190000 400000 380000 380000 $1.30 $0.20 $0.50 cost per equivalent unit (a=b)

Reagoirement ohits : transferred to bottling 370000 x ($1:30+ $0.20+ $0.50) $740000 & work in process - Bottling Alco Dr To work in process - Blending $740000