Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen

Exercise 32

Journal Entries, Cost of Ending Inventories
Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of $10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April:
a. Materials issued to Assembly, $24,000
b. Direct labor cost: Assembly, 500 hours at $9.20 per hour; Finishing, 400 hours at $8 per hour
c. Overhead applied to production
d. Goods transferred to Finishing, $32,500
e. Goods transferred to finished goods warehouse, $20,500
f. Actual overhead incurred, $10,000
Required:
1. Prepare the required journal entries for the preceding transactions.
2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each department's ending work-in-process inventories.