THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 18 THROUGH 21…
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 18 THROUGH 21: Hudson Dock Company manufactures boat docks on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production (so they are using WA only WA costs are evenly allocated). Data for the Assembly Department for May 20X5 are: Work in process, beginning inventory: 70 units Direct materials (100% complete) Conversion costs (25% complete) Units started during May 40 units Work in process, ending inventory: 10 units Direct materials (100% complete) Conversion costs (50% complete) Costs for May: Standard costs for Assembly: Direct materials $4,000 per unit Conversion costs $16,000 per unit Work in process, beginning inventory: Direct materials $140,000 Conversion costs $260,000 Which of the following journal entries properly records the assignment of conversion costs to work-in-process inventory and the conversion-cost variances of the Assembly Department, assuming that conversion costs are 20% higher than expected? A. Work in Process — Assembly 1,680,000 Conversion-Cost Variances 280,000 Assembly Department Conversion Cost Control 1,400,000 B. Work in Process —Assembly 1,680,000 Direct Materials Variances 280,000 Testing Department Conversion Cost Control 1,400,000 C. Work in Process — Assembly 1,400,000 Conversion-Cost Variances 280,000 Assembly Department Conversion Cost Control 1,680,000 D. Work in Process — Testing 1,400,000 Assembly Department Conversion Cost Control 1,400,000