Kota Toy Corporation Manufactures Lizard Dolls in Two Departments, Molding

question 80

Multiple Choice

Kota Toy Corporation manufactures lizard dolls in two departments, Molding and Assembly. In the Molding Department, plastic is injected into a lizard-shaped mold. The dolls that come out of the molds are then transferred to the Assembly Department where hair is applied. Kota uses a weighted-average process cost system to collect costs in both departments.
On January 1, the Molding Department had 4,000 dolls in process. These dolls were 100% complete with respect to direct materials and 70% complete with respect to conversion cost. During January, Molding completed 79,000 dolls. On January 31, Molding had 7,000 dolls in work in process. These dolls were 100% complete with respect to direct materials and 25% complete with respect to conversion cost.
-The equivalent units for February for conversion costs were:

• A) 9,800
• B) 11,200
• C) 12,800
• D) 11,600

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Definitions:

Arm's-Length

Transactions in which the buyers and sellers of a product act independently and have no relationship to each other, ensuring that both parties act in their own self-interest.

Traditional Manufacturing

Manufacturing processes that involve manual assembly or machine operations without the heavy use of computer technologies.

Independent Entities

Organizations or entities that operate autonomously and are not controlled by or dependent on another entity.

Lean Accounting System

An accounting approach that focuses on creating value for customers by optimizing resources and reducing waste.