Lutz Manufacturing Company produces a product in two departments: (1) Mixing and (2) Finishing. The company uses a process cost accounting system.
(a) Purchased raw materials for $50,000 on account.
(b) Raw materials requisitioned for production were:
Mixing department $20,000
Finishing department 14,000
(c) Incurred labor costs of $69,000.
(d) Factory labor used:
Mixing department $44,000
Finishing department 25,000
(e) Manufacturing overhead is applied to the product based on machine hours used in each department:
Mixing department—300 machine hours at $30 per machine hour.
Finishing department—500 machine hours at $20 per machine hour.
(f) Units costing $56,000 were completed in the Mixing Department and were transferred to the Finishing Department.
(g) Units costing $60,000 were completed in the Finishing Department and were transferred to finished goods.
(h) Finished goods costing $40,000 were sold on account for $55,000.
Prepare the journal entries to record the preceding transactions for Lutz Manufacturing Company.