Reference no: EM131805436

Problem

Lutz Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.

(a) Purchased raw materials for $50,000 on account.

(b)Raw materials requisitioned for production were: Direct materialsMixing department$20,000Finishing department14,000

(c)Incurred labor costs of $74,000.

(d)Factory labor used: Mixing department $44,000 Finishing department 30,000

(e)Manufacturing overhead is applied to the product based on machine hours used in each department:Mixing department-400 machine hours at $30 per machine hour.Finishing department-500 machine hours at $20 per machine hour.

(f)Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.

(g)Units costing $70,000 were completed in the Finishing Department and were transferred to finished goods.

(h) Finished goods costing $40,000 were sold on account for $55,000.

REQUIRED: Prepare the journal entries to record the preceding transactions for Lutz Company.