Mocha Company Manufactures a Single Product by a Continuous Process

question 34

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 during the period for direct materials is:

• A) Work in Process--Department 2 100,000 Materials 100,000
• B) Work in Process--Department 2 55,000 Materials 55,000
• C) Work in Process--Department 2 150,000 Materials 150,000
• D) Materials 55,000 Work in Process--Department 2 55,000

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Definitions:

Voting Common Stock

Shares that give the shareholder voting rights in corporate decisions, typically one vote per share owned.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that is paid out before any dividends to common stockholders.

Net Income

A company's overall earnings, after deducting taxes and all other expenses from its total revenue.

Noncontrolling Interest

A minority stake in a company, referring to shareholders who do not have the majority of voting rights or significant influence over the company.