Share
Explore BrainMass

Production cost flow and measurement: journal entries

Edison Company manufactures wool blankets and accounts for production costs using process costing. The following information is available regarding its May inventories.

Beginning Inventory Ending Inventory

Raw materials inventory $28,000 $25,500
Goods in process inventory 220,750 252,000
Finished goods inventory 319,000 277,000

The following additional information describes the company's production activities for May.

Raw material purchases (on credit)......................$135,000
Factory payroll cost (paid in cash)........................791,500
Other overhead cost (Other accounts credited).....43,000
Materials used
Direct.........................$93,500
indirect.......................31,000
Labor used
Direct ........................352,000
indirect......................439,500
Overhead rate as a percent of direct labor ...............110%
Sales (on credit) .......1,500,000

Compute the cost of (a) products transferred from production to finished goods and (b) goods sold.

Solution Summary

The production cost flows and measurement journal entries are examined.

$2.19