Process Costing Using the FIFO Costing and Average Costing Methods Pop Chewing Gum Company produces several flavors of bubble gum. Two basic direct materials, gum base and flavored sweetener, are blended at the beginning of the manufacturing process. No materials are lost in the process, so one kilogram of materials input produces one kilogram of bubble gum. Direct labor and overhead costs are incurred uniformly throughout the blending process. On June 30, 16,000 units were in process. All direct materials had been added, but the units were only 70 percent complete in regard to conversion costs. Direct materials costs of $8,100 and conversion costs of $11,800 were attached to the beginning inventory. During July, 405,000 kilograms of materials were used at a cost of $202,500. Direct labor charges were $299,200, and overhead costs applied during July were $284,000. The ending work in process inventory was 21,600 kilograms. All direct materials have been added to those units, and 25 percent of the conversion costs have been assigned. Output from the Blending Department is transferred to the Packaging Department.

Required

1. Prepare a process cost report using the FIFO costing method for the Blending Department for July.

2. Identify the amount that should be transferred out of the Work in Process Inventory account, and state where those dollars should be transferred.

What is the journal entry?

3. Repeat 1 using the average costing method.

4. Repeat 2 using the average costing method.