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, 2020, inventories consisted of Raw Materials $27,000. Work in Process-Mixing $0, Work in Process-Packaging $253,200, and Finished Goods $291,700. The beginning inventory for Packaging consisted of 14,100 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 51,900 units were started into production in the Mixing Department and the following transactions were completed. 1. Purchased $303,100 of raw materials on account. 2. Issued raw materials for production: Mixing $215,000 and Packaging $48,900. 3. Incurred labor costs of $284,100. 4. Used factory labor: Mixing $184,500 and Packaging $99,600. 5. Incurred $902,000 of manufacturing overhead on account. Applied manufacturing overhead on the basis of $23 per machine hour. Machine hours were 30.500 in Mixing 6. and 7.500 in Packaging. 7. Transferred 48.600 units from Mixing to Packaging at a cost of $980,600. 8. Transferred 57.600 units from Packaging to Finished Goods at a cost of $1,317,000. 9. Sold goods costing $1,642,000 for $2.502,000 on account

Answer 1

Answer-

S. No.	Accounts titles and Explanation	Debit ($)	Credit ($)
1.	Raw materials inventory	303,100
	Accounts payable		303,100
	(To record purchase of inventory on account)
2.	Work in process -Mixing	215,000
	Work in process - Packaging	48,900
	Raw materials inventory		263,900
	(To record issue of raw materials for production)
3.	Factory payroll	284,100
	Wages payable		284,100
	(To record labor cost incurred)
4.	Work in process -Mixing	184,500
	Work in process - Packaging	99,600
	Raw materials inventory		284,100
	(To record factory labor used for production)
5.	Manufacturing overhead expenses	902,000
	Accounts payable		902,000
	(To record manufacturing expenses incurred on account)
6.	Work in process -Mixing (30,500*$23)	701,500
	Work in process - Packaging (7,500*$23)	172,500
	Manufacturing overhead expenses		874,000
	(To record Manufacturing overhead expenses applied in production)
7.	Work in process - Packaging	980,600
	Work in process -Mixing		980,600
	(To record transfer of units from mixing department to packaging department)
8.	Finished goods	1,317,000
	Work in process - Packaging		1,317,,000
	(To record transfer of units from packaging department to finished goods)
9.	Accounts receivable	2,502,000
	Sales		2,502,000
	(To record sales of finished goods on account)
	Cost of goods sold	1,642,000
	Finished goods		1,642,000
	(To record the cost of goods sold on sale of finished goods on account)

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