Chapter 5, Problem 8P

Premier Products Inc. has three departments and uses the process cost system of accounting. A portion of the departmental cost work sheet prepared by the cost accountant at the end of July is reproduced below.

Using the data in P5-7:

1. 1. Draft the necessary entries to charge the materials and labor costs to the appropriate work in process accounts, to apply factory overhead to work in process, and to record the transfer of costs from one department to another.
2. 2. Prepare a statement of cost of goods manufactured for the month ended July 31.