Moots Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system. Purchased raw materials for $50,000 on account. Raw materials requisitioned for production were: Direct materials Mixing department $20,000 Finishing department 14,000 Factory labor used: Mixing department $44,000 Finishing department 30,000 Manufacturing overhead is applied to the product based on machine hours used in each department: Mixing department—400 machine hours at $30 per machine hour. Finishing department—500 machine hours at $20 per machine hour. Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department. Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods. Finished goods costing $40,000 were sold on account for $55,000. Instructions Prepare the journal entries to record the preceding transactions for Moots Company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Moots Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.

Purchased raw materials for $50,000 on account.
Raw materials requisitioned for production were:

Direct materials

Mixing department $20,000

Finishing department 14,000

Factory labor used:

Mixing department $44,000

Finishing department 30,000

Manufacturing overhead is applied to the product based on machine hours used in each department:

Mixing department—400 machine hours at $30 per machine hour.

Finishing department—500 machine hours at $20 per machine hour.

Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods.
Finished goods costing $40,000 were sold on account for $55,000.

Instructions

Prepare the journal entries to record the preceding transactions for Moots Company.

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