Question

If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs

Answer 1

Work in Process—Labeling $196,000; Work in Process—Canning $196,000.

Step-by-step explanation:

Conversion costs are to be accounted for on 50,000 units transferred to the Labelling department at a cost of $3.92 per equivalent unit.

Total conversion cost = 50,000 * 3.92

= $196,000

This would be transferred from the Work in progress account for the Canning department so that account would be credited and the Labelling department Work in progress account which is receiving it would be debited.

DR Work in Process—Labeling...................................... $196,000

CR Work in Process—Canning........................................................ $196,000.