Question

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

Answer 1

Work in Process - Department 2 a/c        Dr. $65000

               To Wages Payable                                 65000

(To record labor charges transferred to WIP dept,. 2)

WIP account would be debited and Wages payable would be credited.