Silva Piping Company produces PVC piping in two processing departments-Fabrication and Packaging. Transactions for the month of July are shown as follows.
1. Direct materials totaling $15,000 are requisitioned and placed into production-$7,000 for the Fabrication department and $8,000 for the Packaging department.
2. Direct labor costs (wages payable) are incurred by each department as follows: Fabrication $4,500 Packaging $6,700
3. Manufacturing overhead costs are applied to each department as follows: Fabrication $20,000 Packaging $14,000
4. Products with a cost of $22,000 are transferred from the Fabrication department to the Packaging department.
5. Products with a cost of $35,000 are completed and transferred from the Packaging department to the finished goods warehouse.
6. Products with a cost of $31,000 are sold to customers.
Required:
1. Prepare journal entries to record each of the previous transactions.
2. In general, how does the process costing system used here differ from a job costing system?