Question

Entries for Flow of Factory Costs for Process Cost System
Radford Inc. manufactures a sugar product by a continuous process, involving three production departments—Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $1,250,000, $660,000, and $975,000, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $328,000, and work in process at the end of the period totaled $295,000.
a. Journalize the entries to record the flow of costs into the Refining Department during the period for (1) direct materials, (2) direct labor, and (3) factory overhead. If an amount box does not require an entry, leave it blank.
1.

Work in Process-Refining Department

Materials

2.

Work in Process-Refining Department

Wages Payable

3.

Work in Process-Refining Department

Factory Overhead-Refining Department

b. Journalize the entry to record the transfer of production costs to the second department, Sifting. If an amount box does not require an entry, leave it blank.

Work in Process-Sifting Department

Work in Process-Refining Department

Answer 1

Solution Debit Credit 1250000 work in process- Refining Department Material 1250000 2. 1 660000 660000 13. work in process- Refining Department wages payable work in process- Refening Department factory overhead- Refening S Department 975000 975000 2918000 Depart Work in process - shifting Department work in process - Refining Department 2918000 cost of Transfer = opening wlp cost + material & wages + factory overhead - closing wip cost = 338000 + 1250000 +660000 +975000 - 295000 = 2918000