Exercise 9: Process costing journal entries

Learning objective:
This exercise illustrates the preparation of journal entries and work-in-process accounts under a process costing system.

Veeta Baking Company has a single product known as Veeta Bread. The company uses a process costing system. The bread is processed in two departments – the mixing department and the baking department. 

The flow of costs through the mixing and baking departments for the month of July has been shown by the following work-in-process T-accounts:

Required: Using the information given in the above T-accounts, make journal entries to show the flow of costs through the mixing and baking departments for the month of July.

Solution

Journal entries for the mixing and baking departments