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 2 for applied overhead is
A) Factory Overhead-Department 2                 80,000     Work in Process-Department 2                                          80,000
B) Work in Process-Department 2              230,000 Factory Overhead-Department 2                                      230,000
C) Work in Process-Department 2                  80,000     Factory Overhead-Department 2                                        80,000
D) Work in Process-Department 2              150,000 Factory Overhead-Department 2                                      150,000

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 2 for applied overhead is
A) Factory Overhead-Department 2                 80,000     Work in Process-Department 2                                          80,000
B) Work in Process-Department 2                  230,000     Factory Overhead-Department 2                                      230,000
C) Work in Process-Department 2                    80,000     Factory Overhead-Department 2                                        80,000
D) Work in Process-Department 2                  150,000     Factory Overhead-Department 2                                      150,000

Quizplus · Accepted Answer

The applied factory overhead for Department 2 was $80,000, so the journal entry should include a credit of $80,000 to Factory Overhead-Department 2. The flow of costs into Department 2 is recorded with a debit to Work in Process-Department 2 for the same amount, $80,000. Therefore, the correct journal entry is:
Work in Process-Department 2            80,000
Factory Overhead-Department 2           80,000

Mocha Company Manufactures a Single Product by a Continuous Process