Mocha Company Manufactures a Single Product by a Continuous Process

question 29

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 1 during the period for applied overhead is

• A) Factory Overhead-Department 1               150,000     Work in Process-Department 1                                           150,000
• B) Work in Process-Department 1                 125,000     Factory Overhead-Department 1                                        125,000
• C) Work in Process-Department 1                   80,000     Factory Overhead-Department 1                                          80,000
• D) Work in Process-Department 1                 150,000     Factory Overhead-Department 1                                        150,000

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Definitions:

Tax

A compulsory monetary fee or a different kind of charge levied on a taxpayer by a government entity to finance government expenses and various public costs.

Buyers

Individuals or entities that purchase goods or services for consumption, use, or investment.

Total Surplus

The combined benefit that all participants (consumers and producers) receive in a market, represented by the sum of consumer and producer surplus.

Market Equilibrium

A condition in a market where the quantity demanded equals the quantity supplied, leading to a stable price.