A baking department receives $7,700 from mixing and adds materials of $600, labor of $1,400 and applied overhead of $500. What amount moves on to packaging?

1. A middle department has four debits, not three, because cost transferred in is one of them. 2. The transferred in cost is $7,700 from mixing. 3. Baking then adds $600 of direct materials, $1,400 of direct labor and $500 of applied overhead. 4. The four debits total $7,700 plus $600 plus $1,400 plus $500, which is $10,200. 5. $2,500 counts only what baking added and ignores everything the batch already carried. _Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 3.2 Process Costing Transactions for a Manufacturing Company_