Question

Entries for Flow of Factory Costs for Process Cost System

Sweeties, 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 $643,900, $225,400, and $148,100, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $36,100, and work in process at the end of the period totaled $44,400.

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.

1.
2.
3.

b. Journalize the entry to record the transfer of production costs to the second department, Sifting.

Answer 1

Solution:
a.	Direct materials
Sr. No.	General Journal	Debit	Credit
1.	Work in Process-Refining Department	643,900
	Materials		643,900
	[Being issuance of materials recorded ]
2.	Work in Process­Refining Department	225,400
	Wages Payable		225,400
	[Being payroll cost of labor recorded ]
3.	Work in Process-Refining Department	148,100
	Factory Overhead-Refining Department		148,100
	[Being factory Overhead applied recorded]
b.
Sr. No.	General Journal	Debit	Credit
	Work in Process-Sifting Department	1,009,100
	Work in Process-Refining Department		1,009,100
	[Being work in process transferred from refining to sifting department recorded]
	work in process in the Refining Department
	beginning	36,100
	Add: During the period
	Materials	643,900
	Labor	225,400
	Factory overhead	148,100
	Less: End of the period balance	($44,400)
	Amount transfer to sifting department	1,009,100
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