Mocha Company Manufactures a Single Product by a Continuous Process,involving

question 28

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 $50,000,$60,000,and $70,000,respectively.Department 2 has transferred-in costs of $390,000 for the current period.In addition,work in process at the beginning of the period for Department 2 totaled $75,000,and work in process at the end of the period totaled $90,000.The journal entry to record the flow of costs into Department 3 during the period is

• A) Work in Process-Department 3 375,000
• Work in Process-Department 2 375,000
• B) Work in Process-Department 3 570,000
• Work in Process-Department 2 570,000
• C) Work in Process-Department 3 490,000
• Work in Process-Department 2 490,000
• D) Work in Process-Department 3 555,000
• Work in Process-Department 2 555,000

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Definitions:

Guaranteed Payment

A payment type in partnerships where a partner is assured a certain amount regardless of the firm's profitability.

Accounting Process

The systematic series of steps followed in the accounting profession to track and record financial transactions and prepare financial statements.

Systematic Recording

The organized and consistent documentation of data or observations according to a defined procedure or method.

Traveler's Checks

A form of preprinted, fixed-amount cheques used by travelers to safely carry money; they can be exchanged for local currency.