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Materials
Cost of Production Report and Journal Entries; fncrease in Quantity with

Added in second Departmentl Average cost. Peneli cologne company produces


in
cologne in a two-step pio""t.. A base fragrance is created by mixing several chemicals

to
the Blending Department. The liquid output of the Blending Department is transferred
The
the
mixture'
to
thin
is
added
chemical
another
where
the Finishing Department,
diluted mixture is then bottled and transferred to Finished Goods Inventory to await sale.
and it
The company uses a process cost System, with an average cost flow assumption,
departments'
producing
its
two
each
of
for
account
process
in
work
maintains a separate
Data related to June operations are:
Blending

Finishing

1,000

1,400

Units in beginning inventory........


Units started in process in Blending

6,000
6,400

Units tianslerred from Btending to Finishing this period"""


Units added to process in Finishing
Department this Peflrd ---.Units translened from Finft$etg
Finished Goods Uis pefitd ------------

6,400

19200

26,OOO

Blending

Finishing

Units in ending inventory:


Blending (60% materials, 2Ek labor'
and 25"/" overhead)----'-.

Finishing (100% materials, 70% labor'


and 70% cverheaC)..-.--.
Cost in beginning inventorY:
Cost lrom preceding departsrent ---Materials
Labor..............

1.(x)o

Factory overhead

Cost added during the currenl period:


Materials
t. Labor..............
Factory overhead

19,620
944
2,375

$8,450
1,395
106
659

29,1 00

28,305

6,880
29,065

60,751

19,9'19

Required:

(1) Prepare a June cost of prtlduction report for each department'


the producing
iZ) p."pur" the appropriate general journal entries to record the charge to
of units from
transfer
the
a-t1"9.9
Juneancl
dunlrg
departments for the costs incurred
Inveritory.
Goods
Finished
to
Finisliing
Blinding ro Finishing and from