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:

Reimbursed

Reimbursed refers to the act of repaying someone for expenses they have incurred, often related to their employment or agreed upon activities.

Qualified

A term indicating that an individual, account, or investment meets the criteria set by relevant regulations or laws, often for tax purposes or eligibility for certain benefits.

Beverly Hills

A city located in Los Angeles County, California, known for its luxury properties, shopping, and as a residence for many Hollywood celebrities.

Itemized Deductions

Expenses listed individually on a tax return that, if eligible, can reduce taxable income more than the standard deduction.