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 $50,000,$60,000,and $70,000,respectively.Department 2 has transferred-in costs of $390,000 for the current period.In addition,work in process at the beginning of the period for Department 2 totaled $75,000,and work in process at the end of the period totaled $90,000.The journal entry to record the flow of costs into Department 3 during the period is
A) Work in Process-Department 3 375,000
Work in Process-Department 2 375,000
B) Work in Process-Department 3 570,000
Work in Process-Department 2 570,000
C) Work in Process-Department 3 490,000
Work in Process-Department 2 490,000
D) Work in Process-Department 3 555,000
Work in Process-Department 2 555,000

Question

Quizplus · Accepted Answer

The total costs transferred to Department 3 include direct materials, direct labor, applied factory overhead, and transferred-in costs from Department 2, minus the ending work in process. Calculation: $50,000 + $60,000 + $70,000 + $390,000 - $90,000 = $555,000.

Mocha Company Manufactures a Single Product by a Continuous Process,involving