Mocha Company Manufactures a Single Product by a Continuous Process

question 48

Multiple Choice

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 into Department 2 for direct labor is

• A) Work in Process-Department 2                   65,000     Wages Payable                                                                  65,000
• B) Wages Payable                                             65,000     Work in Process-Department 2                                      65,000
• C) Work in Process-Department 2                125,000     Wages Payable                                                                125,000
• D) Work in Process-Department 2                185,000     Wages Payable                                                                 185,000

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Definitions:

Risk-Free Rate

The expected earnings from an investment that carries no risk of losing money, typically exemplified by the return on government bonds.

Expected Return

The anticipated value or return that an investor predicts to receive from an investment over a period of time.

Expected Return

The anticipated average return of an investment over a specified period, reflecting the potential profit or loss.

Market Return

The total return on an investment, consisting of income and capital gains relative to market movements over a specified time frame.