Chapter 6, Problem 3P

On December 1, Carmel Valley Production Inc. 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:

During December the following transactions occurred:

1. a. Purchased materials costing $50,000 on account.
2. b. Placed direct materials costing $49,000 into production.
3. c. Incurred production wages totaling $50,500.
4. d. Incurred overhead costs for December:

1. e. Applied overhead to work in process at a predetermined rate of 125% of direct labor cost.
2. f. Completed and transferred 10,000 units to finished goods. (Hint: You should first compute equivalent units and unit costs. The unit cost should include applied, not actual, factory overhead.)

Carmel Valley uses the weighted average cost method. 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.

Required:

Prepare the journal entries to record the above December transactions.