The Allen Company has the following information for the Assembly Department for the month of October: $\begin{array}{lr}
\text { Materials purchased } & \$ 4,000 \
\text { Materials used } & 49,000 \
\text { Direct labor } & 30,000 \
\text { Actual manufacturing overhead } & 56,000 \
\text { Cost of goods completed and transferred to the Finishing Dept. } & 125,000
\end{array}$ Overhead rate is 200 percent of direct labor costs. Allen Company uses a process costing system for the Assembly Department.
The journal entry to record goods completed and transferred out of the Assembly Department would include a
A)debit to Finished Goods Inventory for $125,000.
B)credit to Materials Inventory for $125,000.
C)debit to Work in Process-Assembly Department for $125,000.
D)debit to Work in Process-Finishing Department for $125,000.

Question

Quizplus · Accepted Answer

The journal entry to record goods completed and transferred out of the Assembly Department would include a debit to Work in Process-Finishing Department for $125,000, as this reflects the transfer of costs from the Assembly Department to the Finishing Department.

The Allen Company Has the Following Information for the Assembly