Question - Hanson Company manufactures a single product by a continuous process, involving two production departments. The records indicate that $120,000 of direct materials were issued to and $200,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 5,000 in Department 1. Work in process in the department at the beginning of the period totaled $40,000; and work in process at the end of the period was $25,000.
Instructions - Prepare entries to record
(a) The flow of costs into Department 1 for
(1) Direct materials
(2) Direct labor
(3) Overhead
(b) The transfer of production costs to Department 2.