Re-Tire produces bagged mulch from recycled tires. Production involves shredding tires and packaging the pieces in the Baggingdepartment. All direct materials enter in the Shredding process. A predetermined overhead rate of 185% of direct labor costs is used inboth departments. The following describes production operations for October.Direct materials used (Shredding)Direct labor used (Shredding)Direct labor used (Bagging)Costs transferred from Shredding to BaggingCosts transferred from Bagging to Finished Goods$ 226,00046,800109,200203,000590,000Sales (on credit) for the month total $470,000 and cost of goods sold for the month is $254,000.Prepare journal entries dated October 31 to record October production activities for(1) direct materials usage,(2) direct labor usage,(3) overhead applied,(4) costs transfer from Shredding to Bagging,(5) costs transfer from Bagging to finished goods,(6) credit sales, and(7) cost of goods sold.

Step 1: Calculation of the amount for journal entries.1) Direct material usage (given)= $226,0002)…

Answered: Re-Tire produces bagged mulch from…

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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