Reference no: EM13508631

Appalachian Bakery Company manufactures cookies. Materials are placed in production in the Baking Department and after processing are transferred to the Packing Department, where packing materials are added. The finished products emerge from the Packing Department.

There were no inventories of work in process at the beginning or at the end of August 2008. Finished goods inventory at August 1 was 900 cases of cookies at a total cost of $40,500.

Transactions related to manufacturing operations for August are summarized as follows:

a. Materials purchased on account, $425,000.
b. Materials requisitioned for use: Baking Department, $345,500 ($334,500 entered directly into the product); Packing Department, $73,500 ($72,000 entered directly into the product).
c. Labor costs incurred: Baking Department, $168,000 ($154,300 entered directly into the product); Packing Department, $127,000 ($119,600 entered directly into the product).
d. Miscellaneous costs and expenses incurred on account: Baking Department, $16,300; Packing Department, $6,300.
e. Depreciation charged on fixed assets: Baking Department, $22,400; Packing Department, $11,900.
f. Expiration of various prepaid expenses: Baking Department, $4,700; Packing Department, $2,300.
g. Factory overhead applied to production, based on machine hours: $67,500 for Baking and $30,700 for Packing.
h. Output of Baking Department: 17,000 cases.
i. Output of Packing Department: 17,000 cases of cookies.
j. Sales on account: 17,600 cases of cookies at $90. Credits to the finished goods account are to be made according to the first-in, first-out method.

Instructions

Journalize the entries to record the transactions, identifying each by letter. Include as an explanation for entry (j) the number of cases and the cost per case of cookies sold.