Muller Manufacturing Co. Ltd. makes a product by way of three consecutive processes. The following data relates to process 2 for the month of May.
(i) During May, 1,500 units valued at $226.50 each were transferred from process 1 to process 2.
(ii) Other costs incurred during the month were:
Direct material added $114,750
Direct manufacturing wages $124,850
Manufacturing overheads $158,250
(iii) 200 units were scrapped during the period. Normal losses were estimated to be 81/3% of input during the period. The scrap value of any loss is $78.00 per unit.
(iv) Work-in-progress at the end of May was 400 units and had reached the following degree of completion: Transfer from process 1 100%
Direct material added 75%
Direct manufacturing wages 40%
Production overhead 20%
(v) There were no unfinished goods in process 2 at the beginning of the period.
Required
a. State the journal entries necessary to record the assignment of direct materials, direct manufacturing wages and manufacturing overhead applied to Process 2. Also give the journal entries to record the cost of product completed and transferred to Process 3.