Figure 6-21
Golden Ring Company produces two types of product: Large and Larger. Two work orders for two batches of the products are shown below, along with some additional cost information:
In the Mixing Department, conversion costs are applied on the basis of direct labor hours. Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead. Budgeted direct labor hours were 2,500. It takes three minutes to mix the ingredients needed for each bottle.
Large (Work Order 10) and Larger (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.
-Refer to Figure 6-21. What is Golden Ring Company's journal entry to apply conversion costs in the Mixing Department for Work Order 10?

Question

Figure 6-21
Golden Ring Company produces two types of product: Large and Larger. Two work orders for two batches of the products are shown below, along with some additional cost information:
  In the Mixing Department, conversion costs are applied on the basis of direct labor hours. Budgeted conversion costs for the department for the year were $50,000 for labor and $125,000 for overhead. Budgeted direct labor hours were 2,500. It takes three minutes to mix the ingredients needed for each bottle.
Large (Work Order 10) and Larger (Work Order 11) flow through the Mixing Department first, then through the Cooking and Bottling departments.
-Refer to Figure 6-21. What is Golden Ring Company's journal entry to apply conversion costs in the Mixing Department for Work Order 10?

Quizplus · Accepted Answer

The correct journal entry to apply conversion costs in the Mixing Department is to debit Work in Process-Mixing and credit Conversion Costs Control for the amount of conversion costs applied, which is $17,500.

Figure 6-21 Golden Ring Company Produces Two Types of Product: Large and Large