Chapter 5, Problem 7QC

(Learning Objective 4) A company has two sequential processing departments: Mixing and Forming. In the Mixing Department, Step 5 of the process costing procedure assigned $10,000 to units in ending WIP and $80,000 to units completed and transferred out. What journal entry is needed as a result of these calculations?

1. a. Debit WIP—Mixing Department: $80,000; credit WIP—Forming Department: $80,000
2. b. Debit WIP—Forming Department: $80,000; Credit WIP—Mixing Department: $80,000
3. c. Debit WIP—Forming Department: $10,000; Credit WIP—Mixing Department: $10,000
4. d. Debit WIP—Mixing Department: $10,000; credit WIP—Forming Department: $10,000