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Domino Foods, Inc., manufactures a sugar product by a continuous process involving three production departments—Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $400,000, $150,000, and $100,000, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $40,000, and work in process at the end of the period totaled $35,000.

Required:

a.

(1) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct materials.*

(2) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for direct labor.*

(3) On September 30, journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.*

b. On September 30, journalize the entry to record the transfer of production costs to the second department, Sifting.

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Answer:

Domino Foods, Inc Journal enties

Sept 30

Dr Refining work in processs 400,000

Cr Material 400,000

Sept 30

Dr Refining work in processs 150,000

Cr Labour 150,000

Sept 30

Dr Refining work in processs 100,000

Cr FOH control account 100,000

Sept 30

Dr Stiffing work in processs 575,000

Cr Refining work in processs575,000

Explanation:

Domino Foods, Inc Journal enties

Sept 30

Dr Refining work in processs 400,000

Cr Material 400,000

Sept 30

Dr Refining work in processs 150,000

Cr Labour 150,000

Sept 30

Dr Refining work in processs 100,000

Cr FOH control account 100,000

Sept 30

Dr Stiffing work in processs 575,000

Cr Refining work in processs575,000

(400,000+150,000+100,000-40,000-35,000)

Zviko

Answer:

1.  journalize the entry to record the flow of costs into the Refining Department during the period for direct materials

Work In Process - Refining Department $400,000 (debit)

Raw Materials $400,000 (credit)

2. journalize the entry to record the flow of costs into the Refining Department during the period for direct labor

Work In Process - Refining Department $150,000 (debit)

Salaries and Wages Payable $150,000 (credit)

3.  journalize the entry to record the flow of costs into the Refining Department during the period for factory overhead.

Work In Process - Refining Department $100,000 (debit)

Overheads $100,000 (credit)

4.  journalize the entry to record the transfer of production costs to the second department, Sifting

Work In Process - Sifting Department $645,000 (debit)

Work In Process - Refining Department $645,000 (credit)

Explanation:

Cost Transferred = $400,000+$150,000+$100,000-$40,000+$35,000

                           = $645,000

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