Use the information below to answer the following question(s).
Plastic Molding, Inc.'s costing system utilizes two cost categories; direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for March are:

-Which of the following journal entries correctly reflects the transfer of goods completed from the Assembly Department to the Testing Department?

Question

Use the information below to answer the following question(s).
Plastic Molding, Inc.'s costing system utilizes two cost categories; direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for March are:
 
-Which of the following journal entries correctly reflects the transfer of goods completed from the Assembly Department to the Testing Department?

Quizplus · Accepted Answer

The Assembly Department has completed 2,000 units and transferred them to the Testing Department. The transfer will result in a decrease in the Assembly Department's work-in-process inventory and an increase in the Testing Department's work-in-process inventory. Therefore, the journal entry should debit the Testing Department's work-in-process inventory and credit the Assembly Department's work-in-process inventory for the total cost of 2,000 units. Option B is the only entry that reflects this, with a debit of $14,000 to Testing Department WIP and a credit of $14,000 to Assembly Department WIP.

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