Nature’s Way, Inc., keeps one of its production facilities busy making a perfume called Essence de la Vache

Question

The $32,800 beginning inventory in the Blending Department consisted of the following elements: materials, $8,000; direct labor, $4,000; and overhead applied, $20,800.

Costs incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $17,000; and overhead cost applied to production, $108,000.

Answer 1

Mid-Term Exam I-Nature's Way, Inc., keeps one of its production facilities busy making a perfume Essence de la Vache. The perfume goes through two processing departments: Blending and Bottling. The following incomplete Work in Process account is provided for the Blending Department March: Work in Process-Blending Completed and transferred to Bottling (760,000 ounces) ? March 1 balance 32,800 Materials 147,600 73,200 Direct labor 481,000 Overhead ? March 31 balance The $32,800 beginning inventory in the Blending Department consisted of the following elements: materials, $8,000; direct labor, $4,000; and overhead applied, $20,800. incurred during March in the Bottling Department were: materials used, $45,000; direct labor, $17,000; and overhead cost applied to production, $108,000. Required: 1. Prepare journal entries to record the costs incurred in both the Blending Department and Bottling Department during March. Key your entries to items (a) through (g) below: a.Raw materials were issued for use in production. b.Direct labor costs were incurred. c. Manufacturing overhead costs for the entire factory were incurred, $596,000. (Credit Payable and use a single Manufacturing Overhead control account for the entire actory.) d. Manufacturing overhead was applied to production using a predetermined overhead ate. e. Units that were complete with respect to processing in the Blending Department were ansferred to the Bottling Department, $722,000. f Units that were complete with respect to processing in the Bottling were nsferred to Finished Goods, $920,000. e Completed units were sold on account for $1,400,000. The cost of goods sold was 90,000 Post the iournal entries from (1) above to T-accounts. The following ac