Question: Lane Confectioners produces special orders of sugar candies and

Lane Confectioners produces special orders of sugar candies and chocolates for airlines and hotels. During March, Lane purchased, on credit, 2,100 pounds of confectioner’s sugar @ $20 per pound, 2,300 pounds of granulated sugar @ $.90 per pound, 900 pounds of chocolate @ $4.00 per pound, and 300 pounds of caramel @ $130 per pound from Seattle Confectionery Supply In addition, it purchased for cash 60 dozen eggs @ $.85 per dozen and 90 pounds of paraffin @ $.50 per pound from PMG Foods.
The beginning balances in the inventory accounts were:
Raw Materials Inventory......$2,500
Work in Process Inventory......6,500
Finished Goods Inventory......9,000
The ending balances in the inventory accounts were:
Raw Materials Inventory......$3,500
Work in Process Inventory......5,000
Finished Goods Inventory......6,000
Direct labor costs were $5,400 for 450 hours, indirect labor costs were $2,500, utilities were $400, rent was $750, and other overhead costs totaled $5,000. Manufacturing overhead is applied at $17 per direct labor hour. Sales during the month were $35,000, and selling and administration expenses were $9,000. (Assume that all of the above were noncash transactions.)

Required
a. Prepare journal entries to record the transactions for the month of March. Assume that over- or underapplied overhead is closed to Cost of Goods Sold.
b. Prepare an income statement for the month of March.


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  • CreatedSeptember 12, 2013
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