Ashley Manufacturing Company prepays its insurance coverage fora three-year period. The premium for the three years is $2,700.Each year’s premium is an equal portion of the total payment and ispaid at the beginning of each year. Eighty percent of the premiumapplies to manufacturing operations and 20% applies to selling andadministrative activities. What amounts should be consideredproduct and period costs respectively for the first yearofcoverage?
Product Period
A: 2,700 0
B: 2,160 540
C: 1,440 360
D: 720 180
A. Option A
B. Option B
C. Option C
D. Option D
Walker Corporation uses process costing. A number oftransactions that occurred in June are listed below.
(1) Raw materials that cost $38,200 are withdrawn from thestoreroom for use in the Mixing Department. All of these rawmaterials are classified as direct materials.
(2) Direct labor costs of $36,500 are incurred, but not yet paid,in the Mixing Department.
(3) Manufacturing overhead of $42,100 is applied in the MixingDepartment using the department's predetermined overheadrate.
(4) Units with a carrying cost of $112,400 finish processing in theMixing Department and are transferred to the Drying Department forfurther processing.
(5) Units with a carrying cost of $143,800 finish processing in theDrying Department, the final step in the production process, andare transferred to the finished goods warehouse.
(6) Finished goods with a carrying cost of $138,500 are sold.
Required:
Prepare journal entries for each of the transactions listedabove.
