Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
The journal entry to record the flow of costs into Department 1 for direct labor is
A) Work in Process-Department 1 65,000     Wages Payable                                                                   65,000
B) Wages Payable 125,000     Work in Process-Department 1    125,000
C) Work in Process-Department 1    125,000     Wages Payable                                                                 125,000
D) Wages Payable                                         65,000     Work in Process-Department 1        65,000

Question

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
The journal entry to record the flow of costs into Department 1 for direct labor is
A) Work in Process-Department 1                 65,000     Wages Payable                                                                   65,000
B) Wages Payable                                         125,000     Work in Process-Department 1                                      125,000
C) Work in Process-Department 1              125,000     Wages Payable                                                                 125,000
D) Wages Payable                                           65,000     Work in Process-Department 1                                        65,000

Quizplus · Accepted Answer

The journal entry to record the flow of costs into Department 1 for direct labor would be to debit Work in Process-Department 1 for $125,000 and credit Wages Payable for the same amount. This is because direct labor costs are added to the work in process account as they are incurred, and the wages payable account is credited until payment is made. Option C correctly records this transaction.

Mocha Company Manufactures a Single Product by a Continuous Process