Fire Out Company manufactures its product, Vitadrink, through two manufacturing processes:

Mixing and Packaging.

All materials are entered at the beginning of each process. On October 1, 2020, inventories consisted of Raw Materials $26,000, Work in ProcessâMixing $0, Work in ProcessâPackaging $251,200, and Finished Goods $293,400. The beginning inventory for Packaging consisted of 14,900 units that were 50% complete as to conversion costs and fully complete as to materials. During October, 52,700 units were started into production in the Mixing Department and the following transactions were completed.

1. Purchased $300,000 of raw materials on account.
2. Issued raw materials for production: Mixing $210,000 and Packaging $45,000.
3. Incurred labor costs of $258,900.
4. Used factory labor: Mixing $182,500 and Packaging $76,400.
5. Incurred $810,000 of manufacturing overhead on account.
6. Applied manufacturing overhead on the basis of $24 per machine hour. Machine hours were 28,000 in Mixing and 6,000 in Packaging.
7. Transferred 45,000 units from Mixing to Packaging at a cost of $979,000.
8. Transferred 53,000 units from Packaging to Finished Goods at a cost of $1,315,000.

Sold goods costing $1,604,000 for $2,500,000 on account.

.
No. Account Titles and Explanation Debit Credit
1
2
3
4
5
6
7
8
9

We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.

Account DEBIT CREDIT

1

raw material inventory 300,000

accounts payable 300,000

-

2

work in process inventory- Mixing 210,000 -

work in process inventory- Packaging 45,000

raw material inventory 255,000

-

3

Factory payroll 258,900 -

Wages payable 258,900

-

4

work in process Labor- Mixing 182,500 -

work in process Labor Packaging 76,400

Factory payroll 258,900

-

5

Manufacturing overhead 810,000 -

overhead payable 810,000

-

6

work in process Mixing 672,000 -

work in process Packaging 144,000

Manufacturing overhead 816,000

-

7

work in process Labor Packaging 979,000 -

work in process Labor- Mixing 979,000

-

8

Finished goods 1,315,000 -

work in process Labor Packaging 1,315,000

-

9

Accounts receivable 2,500,000 -

Sales 2,500,000

-

Cost of goods sold 1,604,000 -

Finished goods 1,604,000