Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories: Finished Goods $13,500 Work in Process-Making 6,790 Work in Process-Packing 7,350 Materials 5,100 Departmental accounts are maintained for factory overhead, which both have zero balances on July 1. Manufacturing operations for July are summarized as follows: a. Materials purchased on account .. $149,800 b. Materials requisitioned for use: Phosphate-Making Department.. $105,700 Packaging-Packing Department .. 31,300 Indirect materials-Making Department.. 4,980 Indirect materials-Packing Department . 1,530 Labor used: Direct labor-Making Department Direct labor-Packing Department .. Indirect labor-Making Department . Indirect labor-Packing Department ... C. $ 32,400 ... 40,900 .... 15,400 ... ..18,300 d. Depreciation charged on fixed assets: Making Department .... Packing Department.. $ 10,700 .7,900 e. Expired prepaid factory insurance: Making Department.. Packing Department.. f. Applied factory overhead: .$ 2,000 1,500 Making Department . $ 32,570 Packing Department .... 30,050 g. Production costs transferred from Making Department to Packing Department $166,790 h. Production costs transferred from Packing Department to Finished Goods...... $263,400 į, Cost of goods sold during the period ... . $265,200 in Instructions 1. Journalize the entries to record the operations, identifying each entry by letter. 2. Compute the July 31 balances of the inventory accounts. 3. Compute the July 31 balances of the factory overhead accounts
Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories: Finished Goods $13,500 Work in Process-Making 6,790 Work in Process-Packing 7,350 Materials 5,100 Departmental accounts are maintained for factory overhead, which both have zero balances on July 1. Manufacturing operations for July are summarized as follows: a. Materials purchased on account .. $149,800 b. Materials requisitioned for use: Phosphate-Making Department.. $105,700 Packaging-Packing Department .. 31,300 Indirect materials-Making Department.. 4,980 Indirect materials-Packing Department . 1,530 Labor used: Direct labor-Making Department Direct labor-Packing Department .. Indirect labor-Making Department . Indirect labor-Packing Department ... C. $ 32,400 ... 40,900 .... 15,400 ... ..18,300 d. Depreciation charged on fixed assets: Making Department .... Packing Department.. $ 10,700 .7,900 e. Expired prepaid factory insurance: Making Department.. Packing Department.. f. Applied factory overhead: .$ 2,000 1,500 Making Department . $ 32,570 Packing Department .... 30,050 g. Production costs transferred from Making Department to Packing Department $166,790 h. Production costs transferred from Packing Department to Finished Goods...... $263,400 į, Cost of goods sold during the period ... . $265,200 in Instructions 1. Journalize the entries to record the operations, identifying each entry by letter. 2. Compute the July 31 balances of the inventory accounts. 3. Compute the July 31 balances of the factory overhead accounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process
in the Making Department, where it is turned into granulars. The output of Making is transferred to
the Packing Department, where packaging is added at the beginning of the process. On July 1,
Preston & Grover Soap Company had the following inventories:
Finished Goods $13,500
Work in Process-Making 6,790
Work in Process-Packing 7,350
Materials 5,100
Departmental accounts are maintained for factory overhead, which both have zero balances on July
1.
Manufacturing operations for July are summarized as follows:
a. Materials purchased on account ..
$149,800
b. Materials requisitioned for use:
Phosphate-Making Department..
$105,700
Packaging-Packing Department ..
31,300
Indirect materials-Making Department..
4,980
Indirect materials-Packing Department .
1,530
Labor used:
Direct labor-Making Department
Direct labor-Packing Department ..
Indirect labor-Making Department .
Indirect labor-Packing Department ...
C.
$ 32,400
...
40,900
....
15,400
...
..18,300
d. Depreciation charged on fixed assets:
Making Department ....
Packing Department..
$ 10,700
.7,900
Transcribed Image Text:e. Expired prepaid factory insurance:
Making Department..
Packing Department..
f. Applied factory overhead:
.$ 2,000
1,500
Making Department .
$ 32,570
Packing Department ....
30,050
g. Production costs transferred from Making Department to Packing Department $166,790
h. Production costs transferred from Packing Department to Finished Goods...... $263,400
į, Cost of goods sold during the period ...
. $265,200
in
Instructions
1. Journalize the entries to record the operations, identifying each entry by letter.
2. Compute the July 31 balances of the inventory accounts.
3. Compute the July 31 balances of the factory overhead accounts
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