Scogin Corporation Uses a Standard Cost System in Which Inventories

question 118

Multiple Choice

Scogin Corporation uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold.The standard cost card for the company's only product is as follows: During the year, the company purchased 76,500 pounds of raw material at a price of $8.70 per pound and used 71,880 pounds of the raw material to produce 19,400 units of work in process.

Assume that all transactions are recorded on a worksheet as shown in the text.On the left-hand side of the equals sign in the worksheet are columns for Cash, Raw Materials, Work in Process, Finished Goods, and PP&E (net) .All of the variance columns are on the right-hand-side of the equals sign along with the column for Retained Earnings.

When recording the raw materials used in production, the Work in Process inventory account will increase (decrease) by:

• A)($646,020)
• B)$646,020
• C)($646,920)
• D)$646,920

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Definitions:

Chlorine

A chemical element with symbol Cl and atomic number 17, known for its extensive use in disinfection and as a bleaching agent.

Copper

A red-orange metal that is a ductile, malleable element with very high thermal and electrical conductivity.

Cobalt

Cobalt is a chemical element with symbol Co and atomic number 27, known for its use in alloys and magnets.

Sulfur

A yellow, nonmetallic element that exhibits a characteristic smell and plays a vital role in the chemical industry.