Chapter 6, Problem 24E

Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of $10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April:

1. a. Materials issued to Assembly, $24,000
2. b. Direct labor cost: Assembly, 500 hours at $9.20 per hour; Finishing, 400 hours at $8 per hour
3. c. Overhead applied to production
4. d. Goods transferred to Finishing, $32,500
5. e. Goods transferred to finished goods warehouse, $20,500
6. f. Actual overhead incurred, $10,000

Required:

1. 1. Prepare the required journal entries for the preceding transactions.
2. 2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each department’s ending work-in-process inventories.