Blousson Company Has Two Sequential Processing Departments: Assembly Then Shaping

question 5

Multiple Choice

Blousson Company has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}\hline \text { Beginning WIP inventory } & 7,000 \text { units } \\\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 98,000 \\\hline \text { Direct materials costs in beginning WIP inventory } & \$ 24,500 \\\hline \text { Conversion costs in beginning WIP inventory } & \$ 22,750 \\\hline \text { Units transferred-in } & 45,000 \text { units } \\\hline \text { Transferred-in costs } & \$ 630,000 \\\hline \text { Units completed } & 42,000 \\\hline \text { Costs added: materials } & \$ 155,040 \\\hline \text { Costs added: conversion } & \$ 230,710 \\\hline \text { Ending WIP inventory } & 10,000 \text { units }\\\hline \text { (50\% complete for materials and \( 40 \% \) complete for }\\ \text { conversion) }\\\hline\end{array}$
What would have been the journal entry to record the transfer of product from the assembly department to the shaping department?

• A)WIP-assembly (Dr); WIP-shaping (Cr)630,000
• B)WIP-shaping (Dr); WIP-assembly (Cr)728,000
• C)WIP-assembly (Dr); WIP-shaping (Cr)728,000
• D)WIP-shaping (Dr); WIP-assembly (Cr)630,000

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Definitions:

Inflation Rate

The enhancement of the overall price tag of goods and services in an economy throughout a specific period.

Consumer Price Index

A statistical estimate that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, indicating the rate at which purchasing power is eroding.

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, as an indicator of inflation or deflation.