Zhang Corporation Uses Process Costing

question 84

Essay

Zhang Corporation uses process costing. A number of transactions that occurred in June are listed below.
(1) Raw materials that cost $41,700 are withdrawn from the storeroom for use in the Mixing Department. All of these raw materials are classified as direct materials.
(2) Direct labor costs of $47,700 are incurred, but not yet paid, in the Mixing Department.
(3) Manufacturing overhead of $56,900 is applied in the Mixing Department using the department's predetermined overhead rate.
(4) Units with a carrying cost of $128,300 finish processing in the Mixing Department and are transferred to the Drying Department for further processing.
(5) Units with a carrying cost of $133,800 finish processing in the Drying Department, the final step in the production process, and are transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of $129,200 are sold.
Required:
Prepare journal entries for each of the transactions listed above.

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Definitions:

Board of Directors

A group of individuals elected by shareholders to oversee and make strategic decisions for a company.

Shareholders

Owners of shares in a corporation, holding a portion of the business's stock, and therefore having rights to dividends and a say in company matters.

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, privileges, and liabilities.

S Corporation Election

A tax status election made by a corporation with the Internal Revenue Service to be taxed as a pass-through entity, avoiding double taxation on corporate income.