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               375,000

Work in Process—Department 1                                         375,000

c.

Work in Process—Department 2               330,000

    Work in Process—Department 1                                         330,000

d.

Work in Process—Department 2               215,000

Work in Process—Department 1                                         215,000

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 3 The correct answer is 4 a) 5 Work in process-department 2 390000 Work in process - department 1 390000 9 Firstly we have to calculate the cost of goods transferred to department 2 10 = WIP opening department 1+ direct material+ direct labour + overheads - ending wip department 1 11 = 75000+100000+125000+150000-60000 12 = $ 390000 14 so 15 The correct answer is 16 a) 17 Work in process-department 2 390000 18 Work in process - department 1 390000