Latta Coffee Ltd Has Two Main Processes: Roasting and Packaging

question 87

Multiple Choice

Latta Coffee Ltd has two main processes: roasting and packaging. Roasted coffee beans are transferred to the packaging department before the final product is shipped to customers. The following information for the month of April for the Roasting department is available: total cost of goods completed and transferred from Roasting department to Packaging department is $25 000; ending work in progress in April is $1000; number of equivalent units of conversion is 5000 units.
Which of the following journal entries is appropriate at the end of April?

• A) Debit Packaging Department $26 000, Credit Roasting Department $26 000
• B) Debit Packaging Department $25 000, Credit Roasting Department $25 000
• C) Debit Roasting Department $26 000, Credit Packaging Department $26 000
• D) Debit Roasting Department $25 000, Credit Packaging Department $25 000

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Definitions:

Work in Process Inventory

Inventory that includes all partially completed goods and materials that are in the process of being manufactured.

Manufacturing Costs

Expenses directly related to the creation of goods, including raw materials, labor, and overhead costs involved in production.

Cost of Goods Manufactured

The total production cost of the goods that were completed during a specific accounting period, including labor, materials, and overhead.

Continuous Improvement

An ongoing effort to improve products, services, or processes by making incremental improvements over time or significant improvements at once.