Question:
Tarick Toys Company manufactures video game consoles and accounts for product costs using process costing. The following information is available regarding its June inventories.
|
|
Beginning
Inventory
|
Ending
Inventory
|
|
Raw materials inventory
|
$ 54,000
|
$ 82,500
|
|
Goods in process inventory
|
117,000
|
187,500
|
|
Finished goods inventory
|
120,000
|
148,500
|
The following additional information describes the company's production activities for June.
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Raw materials purchases (on credit)
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$150,000
|
|
Factory payroll cost (paid in cash)
|
300,000
|
|
Other overhead cost (Other Accounts credited)
|
127,875
|
|
Materials used
|
|
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Direct
|
$ 90,000
|
|
Indirect
|
31,500
|
|
Labor used
|
|
|
Direct
|
$262,500
|
|
Indirect
|
37,500
|
|
Overhead rate as a percent of direct labor
|
75%
|
|
Sales (on credit)
|
$750,000
|
Required
1. Compute the cost of (a) products transferred from production to finished goods, and (b) goods sold.
2. Prepare journal entries dated June 30 to record the following production activities during June: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) payroll costs, (e) direct labor costs, (f) indirect labor costs, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods.