On December 1, Stone
Mountain Production Company had a work in process inventory of 1,200 units that
were complete as to materials and 50% complete as to labor and overhead.
P6-2:On December 1,
Stone Mountain Production Company had a work in process inventory of 1,200 units
that were complete as to materials and 50% complete as to labor and overhead.
December 1 costs follow:
Materials.........$6,000
Labor..............2,000
Overhead.........2,000
During December the
following transactions occurred:
a. Purchased materials
costing $50,000 on account.
b. Placed direct materials
costing $49,000 into production.
c. Incurred production
wages totaling $50,500.
d. Incurred overhead costs
for December:
Depreciation..........$20,000
Utilities.................28,000
(cash payment)
Salaries.................11,000
(cash payment)
Supplies..................2,000
(from inventory)
e. Applied overhead to
work in process at a predetermined rate of 125% of direct labor cost.
f. Completed and
transferred 10,000 units to Finished Goods. (Hint: You should first compute equivalent
units and unit costs.)
Stone Mountain uses an
average cost system. The ending inventory of work in process consisted of 1,000
units that were completed as to materials and 25% complete as to labor and
overhead.
Prepare the journal
entries to record the above information for the month of December.
TUTORIAL PREVIEW
Problem
6-2
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Journal
Entries
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a.
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Materials
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50,000
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Accounts Payable
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50,000
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b.
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Work in Process
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49,000
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Materials
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49,000
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c.
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Work in Process
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50,500
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File name: P6-2 Stone Mountain.xls File
type: xls PRICE: $6
