Question

Hello, someone posted the answers (below) to my question. ButI'd like someone to explain how they arrived at each of the numbersin the journal entries so I can learn how to figure it out on myown later. Thanks in advance for your help.

Problem 4-16 Cost Flows [LO1]

Nature’s Way, Inc., keeps one of its production facilities busymaking a perfume called Essence de la Vache. The perfume goesthrough two processing departments: Blending and Bottling.

The following incompleteWork in Process account is provided for the Blending Department forMarch:

Work in Process—Blending

March 1 balance	33,500		Completed and transferred to Bottling (760,000ounces)	?
Materials	138,600
Direct labor	63,200
Overhead	477,000
March 31 balance	?

The $33,500 beginning inventory inthe Blending Department consisted of the following elements:materials, $8,100; direct labor, $3,600; and overhead applied,$21,800.

Costs incurred during March in theBottling Department were: materials used, $45,000; direct labor,$16,800; and overhead cost applied to production, $106,000.

Required:

1.	Prepare journal entries to record the costs incurred in both theBlending Department and Bottling Department during March.(Omit the "$" sign in your response.)

a.	Raw materialswere issued for use in production.
b.	Direct laborcosts were incurred.
c.	Manufacturing overhead costs for the entire factory wereincurred, $626,000. (Credit Accounts Payable and use a singleManufacturing Overhead control account for the entire factory.)
d.	Manufacturingoverhead was applied to production using a predetermined overheadrate.
e.	Units that were complete with respect to processing in theBlending Department were transferred to the Bottling Department,$642,000.
f.	Units that were complete with respect to processing in theBottling Department were transferred to Finished Goods,$710,000.
g.	Completed unitswere sold on account for $1,450,000. The cost of goods sold was$600,000.

Expert Answer

		Debit	Credit
a)	Work in process (Bottling)	$ 45,000
	Work in process (Blending)	$ 138,600
	Raw materials		$ 183,600
	Raw materials used for production
b)	Work in process (Bottling)	$ 16,800
	Work in process (Blending)	$ 63,200
	Salaries payable		$ 80,000
	Direct labor cost incurred on production
c)	Manufacturing overheads	$ 626,000
	Accounts payable		$ 626,000
	Incurred Manufacturing overhead costs forthe entire factory for $626,000
d)	Work in process (Bottling)	$ 106,000
	Work in process (Blending)	$ 477,000
	Manufacturing Overheads		$ 583,000
	Manufacturing overhead applied to production
e)	Work in process - Bottling	$ 642,000
	Work in process - (Blending)		$ 642,000
	Units transferred to Bottling
f)	Finshed goods	$ 710,000
	Work in process - Bottling		$ 710,000
	Units transferred to finished goods
g)	Accounts receivable	$1,450,000
	Sales		$1,450,000
	Goods sold on account
	Cost of goods sold	$ 600,000
	Finished Goods		$ 600,000
	Cost of goods sold worth $600,000