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Question 1

MATCO STEEL COMPANY

Matco Steel Company manufactures a single product by a continuous process, involving two production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. The journal entry to record the flow of costs into Department 1 during the period for direct labor is: Work in Process--Department 1 125,000 Wages Payable 125,000 Wages Payable 125,000 Work in Process--Department 1 125,000 Work in Process--Department 1 60,000 Wages Payable 60,000 Wages Payable 60,000 Work in Process--Department 1 60,000