Rock-On Company produces wooden rocking chairs. The company has two sequential production departments, Cutting and Assembly. The wood is cut and sanded in Cutting and then transferred to Assembly to be assembled and painted. From Assembly, the chairs are transferred to Finished Goods Inventory and they are sold.
Rock-On has compiled the following information for the month of February.
|Cutting Department||Assembly Department|
|Applied manufacturing overhead||150,000||167,000|
|Cost of goods completed and transferred out||234,000||253,000|
Prepare the following journal entries for Rock-On:
1. Amount of direct materials, direct labor, and manufacturing overhead incurred for the Cutting department.
2. Transfer of products from Cutting to Assembly.
3. Amount of direct materials, direct labor, and manufacturing overhead incurred by the Assembly department.
4. Transfer of chairs from Assembly to Finished Goods.
Product costs include the costs incurred in producing goods for customers. Direct materials, direct labor, and manufacturing overhead are product costs, reported as expenses upon the product's sale.
Answer and Explanation: 1
|1)||Work-in-Process - Cutting Department||290,000|
|_____Raw Mateials Inventory||75,000|
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fromChapter 3 / Lesson 21
Learn about WIP in accounting. Discover the work-in-progress meaning, find out why WIP is important in accounting, and examine work-in-progress accounting examples.