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Laffer Lumber produces bagged bark for use in landscaping. Production involves packaging bark chips in plastic bags in a bagging department. The following information describes production operations for October.Bagging Department
Direct materials used ................ $522,000Direct labor used ................... $130,000Predetermined overhead rate (based on direct labor) ..... 175%Goods transferred from bagging to finished goods .... $(595,000)The company's revenue for the month totaled $ 950,000 from credit sales, and its cost of goods sold for the month is $ 540,000.
Prepare summary journal entries dated October 31 to record its October production activities for
(1) Direct material usage,
(2) Direct labor usage,
(3) Overhead allocation,
(4) Goods transfer from production to finished goods,
(5) Credit sales.
The company applies variable overhead on the basis of direct labor-hours. The direct materials price variance is computed when the materials are purchased.
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Fill in the missing amounts and prepare the adjusting entries that were made.
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