Question

1. The Cavy Company accumulated 600 hours of direct labor on Job 567 and 740 hours on Job 999. The direct labor was incurred at a rate of $16 per direct labor hour for Job 567 and $26 per direct labor for Job 999.

Journalize the entry to record the flow of labor costs into production.

(cash, factory overhead, wage expense, wage payable, work in process) __________

(cash, factory overhead, wage expense, accounts payable, work in process) __________

2. FastFlow Paints produces mixer base paint through a two–stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journalize each event if appropriate; if not, provide a short narrative reason as to why you choose not to journalize the action. Nelson, the production manager, accepts an order to continue processing the current run of mixer base paint.

(a)	Materials worth $27,000.00 are withdrawn from raw materials inventory. Of this amount, $25,500.00 will be issued to the Mixing Department and the balance will be issued to the Maintenance Department to be used on production line machines.
(b)	Nelson calculates that labor for the period is $12,500.00. Of this amount, $1,750.00 is for maintenance and indirect labor. The remainder is directly associated with mixing.
(c)	Nelson, who is paid a salary but earns about $35.00/hour, spends 1 hour inspecting the production line.
(d)	The manufacturing overhead drivers for mixing are hours of mixer time at $575.00 per hour, and material movements from materials at $125.00 per movement. An inspection of the machine timers reveals that a total of 8 hours has been consumed in making this product. An inspection of "stocking orders" indicates that only one material movement was utilized to load the raw materials. (Note: All values have been journalized to Factory Overhead, you need only apply them to the production run.)
(e)	Within Fast-Flow, items are transferred between departments at a standard cost. This production run has created 4,015 gallons of mixer base paint. This paint is transferred to Packaging at a standard cost of $10.05 per gallon. (Round calculation to nearest whole dollar.)
(f)	Packaging draws $755.00 of materials for packaging of this production run.
(g)	Packaging documents that 12 hours of direct labor at $10.25 per hour were consumed in the packaging of this production run.
(h)	Packaging uses a cost driver of direct labor hours to allocate manufacturing overhead at the rate of $25.00 per hour.
(i)	Packaging transfers 4,015 gallons of packaged goods to Finished Goods Inventory at a standard cost of $10.34 per gallon. (Round calculation to nearest whole dollar.)

Answer 1

Requirement 1
Sr.No.	Particulars	Debit	Credits
Job 567
1	Wage expense	$        9,600
	To Wages payable		$        9,600
	(Being wage expense booked for job 567)
2	Wages payable	$        9,600
	To cash		$        9,600
	(Being wages paid for Job 567)
3	Factory Overhead	$        9,600
	To Wages expense		$        9,600
	(Being wages expenses trf to Factory overhead)
4	Work in Progress	$        9,600
	To Factory Overhead		$        9,600
	(Being factory o/h trf to WIP)
Job 999
1	Wage expense	$     19,240
	To Wages payable		$     19,240
	(Being wage expense booked for job 999)
2	Wages payable	$     19,240
	To cash		$     19,240
	(Being wages paid for Job 999)
3	Factory Overhead	$     19,240
	To Wages expense		$     19,240
	(Being wages expenses trf to Factory overhead)
4	Work in Progress	$     19,240
	To Factory Overhead		$     19,240
	(Being factory o/h trf to WIP)

Requirement 2
Event	Particulars	Debit	Credits
a	Mixing Department	$        25,500
	Maintenance Department	$          1,500
	To Raw Material		$     27,000
	(Being Raw material issued)
b	Mixing Department	$        10,750
	Maintenance Department	$          1,750
	To labour Payable		$     12,500
	(Being Labour charged to respective departments)
c	Inspecction charges	$                35
	To Wages payable		$              35
	(Being wages to nelson is payable)
d	Details of cost drive not provided hence we can not charge factory overhead to respective departments
e	Packing Department	$        40,351
	To Mixing Department		$     40,351
	(Being items trf to packing department at standard cost)
f	Packing Department	$              755
	To material		$           755
	(Being packing material issued)
g	Packing Department	$              123
	To labour Payable		$           123
	(Being Labour charged to respective departments)
h	Packing Department	$              300
	To Manufacturing overhead		$           300
	(being manufacturing overhead allocated to packing department)
i	Finished Goods	$        41,515
	To Packing department		$     41,515
	(Being items trf to finished goods)