Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. If the units completed were transferred to the Labeling Department,what is the appropriate journal entry to transfer the conversion costs?
A)Work in Process-Labeling $183,100;Work in Process-Canning $183,100.
B)Work in Process-Labeling $196,000;Work in Process-Canning $196,000.
C)Finished Goods-Labeling $183,100;Finished Goods-Canning $183,100.
D)Work in Process-Labeling $196,000;Finished Goods-Canning $196,000.
E)Finished Goods $242,800;Work in Process $242,800.

Question

Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.  If the units completed were transferred to the Labeling Department,what is the appropriate journal entry to transfer the conversion costs?
A)Work in Process-Labeling $183,100;Work in Process-Canning $183,100. 
B)Work in Process-Labeling $196,000;Work in Process-Canning $196,000. 
C)Finished Goods-Labeling $183,100;Finished Goods-Canning $183,100. 
D)Work in Process-Labeling $196,000;Finished Goods-Canning $196,000. 
E)Finished Goods $242,800;Work in Process $242,800.

Quizplus · Accepted Answer

The appropriate journal entry to transfer the conversion costs would be to credit Work in Process-Canning for $196,000 (sum of conversion costs) and debit Work in Process-Labeling for $196,000 (same amount). This reflects the transfer of costs from one department to another. The other answer choices are either incorrect (A, C, D, and E) or do not reflect the correct accounts to be debited and credited (choice E).

Following Is a Partial Process Cost Summary for Mitchell Manufacturing's