Tarick toys company manufactures video game consoles and


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                          Ending
                                                          Inventory                       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.

Raw materials purchases (on credit) . . . . . . . . . . . . . . . . . . . $150,000

Factory payroll cost (paid in cash) . . . . . . . . . . . . . . . . . . .  . 300,000

Other overhead cost (Other Accounts credited) . . . . . . . . . . . .127,875

Materials used
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.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Tarick toys company manufactures video game consoles and
Reference No:- TGS02334239

Now Priced at $10 (50% Discount)

Recommended (97%)

Rated (4.9/5)