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22 March, 18:06

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

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  1. 22 March, 18:23
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    Given that,

    Direct materials = $100,000

    Direct labor = $125,000

    Applied factory overhead for Department 1 = $150,000

    Direct materials = $50,000

    Direct labor = $60,000

    Applied factory overhead for Department 2 = $70,000

    Therefore, the journal entry is as follows:

    Work in Process - Department 3 A/c Dr. $555,000

    To Work in Process - Department 2 $555,000

    (To record the flow of costs into Department 3 during the period)

    Workings:

    Work in Process - Department 3:

    = $100,000 + $125,000 + $150,000 + $50,000 + $60,000 + $70,000

    = $555,000
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