EX 20-3 Entries for flow of factory costs for process cost system

Domino Foods, 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 $335,000, $127,000, and $91,200, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $26,800, and work in process at the end of the period totaled $24,400.

Journalize the entries to record (a) the flow of costs into the Refining Department during the period for (1) direct materials, (2) direct labor, and (3) factory overhead, and (b) the transfer of production costs to the second department, Sifting.


Answer:

a. 1. Work in Process—Refining Department 335,000
Materials 335,000
2.
 Work in Process—Refining Department 127,000
Wages Payable 127,000
3.
 Work in Process—Refining Department 91,200
Factory Overhead—Refining Department 91,200
b.
 Work in Process—Sifting Department* 555,600
Work in Process—Refining Department 555,600
*$26,800 + $335,000 + $127,000 + $91,200 – $24,400