Reference no: EM132596009

The Active University Press is wholly owned by the university. It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories (direct materials and direct production labour) and one indirect-cost pool (production overhead, allocated on the basis of direct production labour costs).

The data given (in thousands) pertain to 2019.

Direct materials and supplies purchased on credit .......................................................$800

Direct materials used.......................................................................................................710

Indirect materials issued to various production departments...........................................100

Direct production labour............................................................................................ 1 300

Indirect production labour incurred by various production departments...........................900

Depreciation on building and production equipment.......................................................400

Miscellaneous production overhead incurred by various production departments

(ordinarily would be detailed as repairs, photocopying, utilities, etc.)..............................550

Production overhead allocated at 160% of direct production labour costs.........................?

Cost of products produced........................................................................................ 4 120

Revenues................................................................................................................. 8 000

Cost of goods sold (before adjustment for under- or over-allocated

prod o/h)................................................................................................................ 4 020

Inventories, 31 December 2018 (not 2019):

Materials control............................................................................................................... 100

Work-in-process control.................................................................................................... .60

Finished goods control.......................................................................................................500

Required:

Question a) Prepare journal entries to record the events that occurred during 2019.

Question b) What is an operating department and how is it different from a support department? Give examples of each.