Lutz 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:Direct materialsMixing department$20,000Finishing department14,000(c)Incurred labor costs of $74,000.(d)Factory labor used:Mixing department$44,000Finishing department30,000(e)Manufacturing overhead is applied to the product based on machine hours used in each department:Mixing department—400 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 $70,000 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.REQUIRED : Prepare the journal entries to record the preceding transactions for Lutz Company.