Reference no: EM131538686
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.