Nevada Manufacturing has two processing departments,Department I and Department II.During 2014,direct materials worth $38,000 purchased on account were assigned to Department I.At the end of 2014,when the production cost report for Department 1 was prepared,Nevada assigned $46,000 to the units transferred from Department I to Department II.The journal entry to record the transfer of units to Department II will ________.

Question

Quizplus · Accepted Answer

The cost assigned to the units transferred from Department I to Department II is $46,000, so the journal entry should debit Work-in-Process Inventory-Department II for $46,000 and credit Work-in-Process Inventory-Department I for $46,000. Option A is incorrect because it only records the direct materials purchased for Department I but does not account for the cost of transferring the units to Department II. Option B is also incorrect because it records the transfer in the opposite direction. Option C only records the direct materials purchased for Department I but does not account for the cost of transferring the units to Department II.

Nevada Manufacturing Has Two Processing Departments,Department I and Department II