Fast-Flow Paints Produces Mixer Base Paint Through a Two-Stage Process

question 18

Short Answer

Fast-Flow Paints produces mixer base paint through a two-stage process, Mixing and Packaging. The following events depict the movement of value into and out of production. Journalize each event if appropriate; if not, provide a short narrative reason as to why you choose not to journalize the action.  Nelson, the production manager, accepts an order to continue processing the current run of mixer base paint.
(a) Materials worth $27,000.00 are withdrawn from raw materials inventory. Of this amount, $25,500.00 will be issued to the Mixing Department and the balance will be issued to the Maintenance Department to be used on production line machines.
(b) Nelson calculates that labor for the period is $12,500.00. Of this amount, $1,750.00 is for maintenance and indirect labor.  The remainder is directly associated with mixing.
(c) Nelson, who is paid a salary but earns about $35.00/hour, spends 1 hour inspecting the production line.
(d) The manufacturing overhead drivers for mixing are hours of mixer time at $575.00 per hour, and material movements from materials at $125.00 per movement. An inspection of the machine timers reveals that a total of 8 hours has been consumed in making this product. An inspection of "stocking orders" indicates that only one material movement was utilized to load the raw materials. ( Note: All values have been journalized to Factory Overhead, you need only apply them to the production run.)
(e) Within Fast-Flow, items are transferred between departments at a standard cost. This production run has created 4,015 gallons of mixer base paint. This paint is transferred to Packaging at a standard cost of $10.05 per gallon. (Round calculation to nearest whole dollar.)
(f) Packaging draws $755.00 of materials for packaging of this production run.
(g) Packaging documents that 12 hours of direct labor at $10.25 per hour were consumed in the packaging of this production run.
(h) Packaging uses a cost driver of direct labor hours to allocate manufacturing overhead at the rate of $25.00 per hour.
(i) Packaging transfers 4,015 gallons of packaged goods to Finished Goods Inventory at a standard cost of $10.34 per gallon. (Round calculation to nearest whole dollar.)

Comprehend how team membership influences individual attitudes and behaviors.

Understand the variety of challenges teams face, including personality conflicts, work style differences, and task ambiguity.

Acknowledge the critical nature of listening skills in teamwork.

Recognize the importance of persuasion and cooperation in team dynamics.

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Definitions:

Corporation

A legal entity separate from its owners, with rights to own assets, incur liabilities, hire employees, enter contracts, and provide protection for its shareholders.

Sole Proprietorship

A type of business ownership where a single individual owns, manages, and is responsible for all aspects of the business.

Limited Liability Corporation

An organizational form that integrates the single-level taxation characteristic of partnerships and sole proprietorships with the protective limited liability feature of corporations.

Debt Financing

Acquiring funds for business activities by borrowing money, typically through loans or by issuing bonds, that must be repaid with interest.