Concept explainers
(1) Computation of (a) Production Costs transferred from Mixing to Blending, (b)Production Costs Transferred from Blending to Finished Goods and (c) Cost of goods Sold
Concept Introduction:
Production Cost Flow:
In a production unit, finished goods need to pass through a number of departments until they are ready, thus the costs incurred in each department help to understand the total cost incurred to produced the goods.
Requirement 1
To Determine:
- Production Cost Transferred from Mixing to Blending
- Production Cost Transferred from Blending to Finished Goods
- Cost of Goods Sold
(1) Computation of (a) Production Costs transferred from Mixing to Blending, (b)Production Costs Transferred from Blending to Finished Goods and (c) Cost of goods Sold

Answer to Problem 1BPSB
- Production Cost transferred from Mixing to Blending=$263000
- Production Cost Transferred from Blending to Finished Goods=$388488
- Cost of Goods Sold=$408438
Explanation of Solution
Explanation:
Work In Process Inventory-Mixing | |||
Particulars | Amount | Particulars | Amount |
Beginning Balance | 156000 | Production Cost Transferred to Blending Department | 263000 |
Direct Materials Used-Mixing | 174000 | ||
Direct Labour-Mixing | 52500 | ||
Factory Overhads(Budgeted) | 130500 | Ending Balance | 250000 |
(75% of Direct Materials) | |||
513000 | 513000 |
Work in process Inventory-Blending | |||
Particulars | Amount | Particulars | Amount |
Beginning Balance | 160000 | Production Cost Transferred to Finished Goods | 388488 |
Production Cost from Mixing Department | 263000 | ||
Direct Materials Used-Blending | 44000 | ||
Direct Labour-Blending | 74680 | ||
Factory Overhads(Budgeted) | 44808 | Ending Balance | 198000 |
(60% of Direct Labour) | |||
586488 | 586488 |
Finished Goods Invnetory | |||
Particulars | Amount | Particulars | Amount |
Beginning Balance | 80200 | Cost of Goods Sold | 408438 |
Production Cost from Blending Department | 388488 | ||
Ending Balance | 60250 | ||
468688 | 468688 |
- Journal Entries to record the flow of cost
Concept Introduction:
Production Cost Flow:
In a production unit, finished goods need to pass through a number of departments until they are ready, thus the costs incurred in each department help to understand the total cost incurred to produced the goods.
Requirement 2
To Determine:
- Journal Entries to record the flow of cost

Answer to Problem 1BPSB
Date | Particulars | Debit | Credit |
31-Mar | Raw Material Inventory | 212000 | |
To Accounts Payable | 212000 | ||
(Being Raw Materials Purchased) | |||
31-Mar | Work in Process Inventory-Mixing | 174000 | |
Work in Process Inventory-Blending | 44000 | ||
To Raw Materials Inventory | 218000 | ||
(Being Raw Materials Consumed) | |||
31-Mar | Factory | 41200 | |
To Raw Materials Inventory | 41200 | ||
(Being Indirect Materials Consumed) | |||
31-Mar | Direct Labour-Mixing | 52500 | |
Direct Labour-Blending | 74680 | ||
To Salaries And Wages | 127180 | ||
(Being Wages Charged to Mixing and Blending) | |||
31-Mar | Factory Overheads | 69500 | |
To Salaries and Wages | 69500 | ||
(Being Indirect Labour Charged to Factory Overheads) | |||
31-Mar | Salaries and Wages | 196680 | |
To Cash | 196680 | ||
(Being Salaries and Wages Paid) | |||
31-Mar | Factory Overheads | 64660 | |
To Accounts Payable | 64660 | ||
(Being Factory Overheads Paid) | |||
31-Mar | Work in Process Inventory-Mixing | 130500 | |
Work in Process Inventory-Blending | 44808 | ||
To Factory Overheads | 175308 | ||
(Being Factory Overheads Applied) | |||
31-Mar | Work in Process Inventory-Blending | 263000 | |
To Work in process Inventory-Mixing | 263000 | ||
(Being Production cost of mixing transferred to Blending Dept) | |||
31-Mar | Work in Process Inventory-Mixing | 388488 | |
To Finished Goods Inventory | 388488 | ||
(Being Production cost of Blending transferred to Finished Goods Inventory) | |||
31-Mar | Finished Goods Inventory | 408438 | |
To Cost of Sales | 408438 | ||
(Being Cost of Goods Sold) | |||
31-Mar | 490000 | ||
To Sales | 490000 | ||
(Being Sales Made) |
Explanation of Solution
Explanation:
The entries as have been passed as per transactions specified in the question as on 31 Mar.
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Chapter 20 Solutions
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