At the end of July, a journal entry is prepared to record the transfer of goods from the Mixing Department to the Baking Department.Which one of the following indicates the amount of this journal entry?

Question

Quizplus · Accepted Answer

The amount of the journal entry would be based on the number of units transferred from the Mixing Department to the Baking Department multiplied by the cost per unit. This is because the transfer of goods represents a transfer of costs from one department to another. The costs of the Mixing Department would have been accounted for in previous journal entries, and the inventory in the department on July 31 may not be relevant to this particular transfer. Additionally, the sum of the costs of direct materials and nonmanufacturing overhead incurred in the Mixing Department during July would not necessarily be the same as the cost of the goods being transferred to the Baking Department.

At the End of July, a Journal Entry Is Prepared