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The cost report for Best Chips summarizes how manufacturing costs

The cost report for Best Chips summarizes how manufacturing costs

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The cost report for Best Chips summarizes how manufacturing costs (direct materials, direct labor,  and manufacturing overhead) are assigned to the three departments. The report for June is as  follows:  Best Chips Cost Summary For the Month Ended June 30, 20X2 Work-in-Process Inventory Raw Materials Inventory Factory Labor Factory Overhead Preparation Baking Packaging Beginning balance 5,200 3,200 June costs 4,600 7,100 2,300 Costs assigned Direct materials (6,500) 2,800 3,700 Indirect materials (1,300) 1,300 Direct labor (5,300) 2,900 500 1,900 Indirect labor (1,800) 1,800 Factory overhead (5,525) 435 3,000 2,090 Predetermined overhead rates 15% 600% 110% The raw materials are assigned based on material requisition forms, the labor based on time tickets, 
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Unformatted text preview: and the overhead based on predetermined overhead rates based on direct labor dollars. The journal entries to record these transactions are made prior to the period end entries that transfer the amounts from one work-in-process inventory account to another, from work-in-process inventory to finished goods inventory, and from finished goods inventory to cost of goods sold. The letters of the journal entries used to illustrate the accounting for process cost systems correspond to the letters in Figure 1 ....
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