Question:
Peneli Cologne Company produces cologne in a two-step process. A base fragrance is created by mixing several chemicals in the Blending Department. The liquid output of the Blending Department is transferred to the Finishing Department, where another chemical is added to thin the mixture. The diluted mixture is then bottled and transferred to Finished Goods Inventory to await sale. The company uses a process cost system, with an average cost flow assumption, and it maintains a separate work in process account for each of its two producing departments. Data related to June operations are:
Required:
(1) Prepare a June cost of production report for each department.
(2) Prepare the appropriate general journal entries to record the charge to the producing departments for the costs incurred during June and to record the transfer of units from Blending to Finishing and from Finishing to Finished Goods Inventory.
Transcribed Image Text:
Blending Finishing 1,000 1.400 Units in beginning inventory Units started in process in Biending Dopartment this periodepe 6,000 6,400 Units transferred from Blending to Finishing this period Units added to process in Finishing Units transferred from Finishing to Units in ending inventory Department this period. Finished Goods this period Blending (60% materials, 20% labor, 6,400 19.200 26,000 and 25% overhead) Finishing (100% materials, 70% labor, 600 and 70% overhead) 1,000 Cost in beginning inventory: Cost from preceding departmentn Materials c... Labor Factory overhead.. $8.450 1-395 106 659 $19.620 944 2,375 Cost added during the current period Materíals Laborc Factory overhead 129,100 6,880 29,065 28,305 60,751