Q28E - Horngren'S Financial And Managerial Accounting

Question

Oxford Company had the following transactions in October:

1. Purchased raw materials on account, \(70,000

2. Used materials in production: \)26,000 in the Mixing Department; \(14,000 in the

Packaging Department; \)1,000 in indirect materials

3. Incurred labor costs: \(8,000 in the Mixing Department; \)7,200 in the Packaging

Department; \(2,200 in indirect labor

4. Incurred manufacturing overhead costs: \)3,500 in machinery depreciation; paid

\(2,300 for rent and \)1,590 for utilities

Prepare the journal entries for Oxford Company.

Step-by-Step Solution

Answer

 The journal entries to record the purchase of Raw material, uses of raw material, labor cost and manufacturing overhead are shown in step 2.

Step-by-Step Solution: Step 1: Manufacturing Process

The manufacturing process means the process of producing the products. It is done by using the raw material which is converted by applying the conversion cost into the final product.

Step 2: Journal entries to record the transactions

Date	Particulars	Debit ($)	Credit ($)
1.	Raw material	70,000
	Account payable		70,000
2.	Work-in-process inventory-Mixing department	26,000
	Work-in-process inventory-Packaging department	14,000
	Manufacturing overhead	1,000
	Raw material		41,000
3.	Work-in-process inventory-Mixing department	8,000
	Work-in-process inventory-Packaging department	7,200
	Manufacturing overhead	2,200
	Wages payable		17,400
4.	Manufacturing overhead	3,500
	Accumulated depreciation		3,500
5.	Manufacturing overhead	3,890
	Cash (2,300+1,590)		3,890