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 $196,000; Finished Goods-Canning $196,000.
B) Work in Process-Labeling $196,000; Work in Process-Canning $196,000.
C) Work in Process-Labeling $183,100; Work in Process-Canning $183,100.
D) Finished Goods $242,800; Work in Process $242,800.
E) Finished Goods-Labeling $183,100; Finished Goods-Canning $183,100.

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 $196,000; Finished Goods-Canning $196,000. 
B) Work in Process-Labeling $196,000; Work in Process-Canning $196,000. 
C) Work in Process-Labeling $183,100; Work in Process-Canning $183,100. 
D) Finished Goods $242,800; Work in Process $242,800. 
E) Finished Goods-Labeling $183,100; Finished Goods-Canning $183,100.

Quizplus · Accepted Answer

The correct journal entry to transfer conversion costs from one department to another is to debit the Work in Process account of the receiving department (Labeling) and credit the Work in Process account of the transferring department (Canning) for the same amount.

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