Re-Tire produces bagged mulch made from recycled tires. Production involves shredding tires and packaging the pieces for sale in the bagging department. All direct materials enter in the first process. The following describes production operations for October. Direct materials used $226,000
Direct labor used 30% in Shredding; 70% in Bagging. $112,000
Predetermined overhead rate (based on direct labor) 165 %
Transferred to Bagging $206,500
Transferred to finished goods $583,000

The company's revenue for the month totaled $470,000 from credit sales, and its cost of goods sold for the month is $240,000.

Required:
Prepare summary journal entries dated October 31 to record its October production activities for:

a. Direct materials usage
b. Direct labor incurred
c. Overhead applied
d. Goods transfer from Shredding to Bagging.
e. Goods transfer from Bagging to finished goods.
f. Credit sales
g. Cost of goods sold.

a.

Work In Process : Direct Materials $226,000 (debit)

Raw Materials $226,000 (credit)

Direct Materials used in production

b.

Work In Process : Shredding $33,600 (debit)

Work In Process : Bagging $78,400 (debit)

Salaries Payable $112,000 (credit)

Direct labor incurred during production

c.

Work In Process : Shredding $55,440 (debit)

Work In Process : $129,360 Bagging

Overheads $184,800 (credit)

Overheads applied to production cost

d.

Work In Process : Bagging $206,500 (debit)

Work In Process : Shredding $206,500 (credit)

Manufacturing costs transferred from Shredding to Bagging

e.

Work In Process : Shredding $583,000 (debit)

Finished Goods $583,000 (credit)

Manufacturing Costs  transfer from Bagging to finished goods

f.

Account Receivable $470,000 (debit)

Sales Revenue $470,000 (credit)

Credit Sales during the month

g.

Cost of Goods Sold $240,000 (debit)

Finished Goods $240,000 (credit)

Cost of Goods Sold during the month

Explanation:

See the Journal entries and their narrations prepared above

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.