Cromer Manufacturing Company produces a product in two departments: (1) Production and (2) Assembly. The company uses a process cost accounting system.
a. Aug 3 Purchased raw materials for $51,000 on account.
b. Aug 5 Raw materials requisitioned for production were:
Direct materials
Production department $30,000
Assembly department $14,000
c. Aug 8 Incurred labor costs of $57,000.
d. Aug 12 Factory labor used:
Production department $32,000
Assembly department $25,000
e. Aug 15 Manufacturing overhead is applied to the product based on machine hours used in each department:
Production department-250 machine hours at $30 per machine hour.
Assembly department-500 machine hours at $20 per machine hour.
f. Aug 20 Units costing $58,000 were completed in the Production Department and were transferred to the Assembly Department.
g. Aug 25 Units costing $50,000 were completed in the Assembly Department and were transferred to finished goods.
h. Aug 30 Finished goods costing $20,000 were sold on account for $45,000.