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 from Department 1 into Department 2 is
A) Work in Process-Department 2               390,000     Work in Process-Department 1                                         390,000
B) Work in Process-Department 2               330,000     Work in Process-Department 1                                         330,000
C) Work in Process-Department 2               215,000 Work in Process-Department 1                                         215,000
D) Work in Process-Department 2               375,000 Work in Process-Department 1                                         375,000

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 from Department 1 into Department 2 is
A) Work in Process-Department 2               390,000     Work in Process-Department 1                                         390,000
B) Work in Process-Department 2               330,000     Work in Process-Department 1                                         330,000
C) Work in Process-Department 2               215,000     Work in Process-Department 1                                         215,000
D) Work in Process-Department 2               375,000     Work in Process-Department 1                                         375,000

Quizplus · Accepted Answer

The correct answer is A because the total cost transferred from Department 1 to Department 2 is $390,000 ($100,000 + $125,000 + $150,000 + $15,000).

Mocha Company Manufactures a Single Product by a Continuous Process