Pottle Ice Cream uses a mixing department and a freezingdepartment to produce its ice cream. Its process costing system inthe mixing department has two direct materials cost categories (icecream mix and flavourings) and one conversion cost pool.
The following data pertain to the mixing department for April2018:
Work-in-process, 1April 0
Started inApril 10000 litres
Completed and transferred tofreezing 8500 litres
Costs:
Ice creammix $27 000
Flavourings $4080
Conversioncosts $53 700
The ice cream mix is introduced at the start of operations inthe mixing department, and the flavourings are added when theproduct is 40% completed in the mixing department. Conversion costsare added evenly during the process. The ending work-in-process inthe mixing department is 30% complete.
Required
- Prepare and explain the journal entries for the transfer ofgoods to the freezing department and complete the WIP ledgeraccount for April 2018
- Give three industries that use process-costing system
