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 conversion costs from the Canning Department to the Labeling Department would be to credit Work in Process-Canning for the total conversion costs incurred ($196,000) and debit Work in Process-Labeling for the same amount. This is because the conversion costs are being transferred from one department's work in process account to another department's work in process account.

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