Allen Company has the following information for the Assembly Department for October:
$\begin{array}{lr}
\text { Materials purchased } & \$ 40,000 \
\text { Materials used } & 44,000 \
\text { Direct labour } & 30,000 \
\text { Actual manufacturing overhead } & 56,000 \
\text { Cost of goods completed and transferred to the Finishing Dept. } & 120,000
\end{array}$
Overhead rate is 200 percent of direct labour costs.
Allen Company uses a process costing system for the Assembly Department.
-Refer to the figure.What debit or credit would the journal entry to record goods completed and transferred out of the Assembly Department include?
A)a debit to finished goods inventory for $120,000
B)a credit to materials inventory for $120,000
C)a debit to work in process-Assembly Department for $120,000
D)a debit to work in process-Finishing Department for $120,000

Question

Quizplus · Accepted Answer

The journal entry to record goods completed and transferred out of the Assembly Department would include a debit to Work in Process-Finishing Department for $120,000, as this represents the cost of goods transferred to the next stage in the production process.

Allen Company Has the Following Information for the Assembly Department