Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:
(c) Incurred labor costs of $74,000.
(d) Factory labor used:
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing department-400 machine hours at $30 per machine hour.
Finishing department-500 machine hours at $20 per machine hour.
(f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
(g) Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods.
(h) Finished goods costing $40,000 were sold on account for $55,000.
Instructions
Prepare the journal entries to record the preceding transactions for Lutz Company.

Question

Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:  
(c) Incurred labor costs of $74,000.
(d) Factory labor used:  
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing department-400 machine hours at $30 per machine hour.
Finishing department-500 machine hours at $20 per machine hour.
(f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
(g) Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods.
(h) Finished goods costing $40,000 were sold on account for $55,000.
Instructions
Prepare the journal entries to record the preceding transactions for Lutz Company.

Quizplus · Accepted Answer

The Answer of Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:  
(c) Incurred labor costs of $74,000.
(d) Factory labor used:  
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing department-400 machine hours at $30 per machine hour.
Finishing department-500 machine hours at $20 per machine hour.
(f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
(g) Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods.
(h) Finished goods costing $40,000 were sold on account for $55,000.
Instructions
Prepare the journal entries to record the preceding transactions for Lutz Company.

Lutz Company Produces a Product in Two Departments: (1) Mixing