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

Question

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

Quizplus · Accepted Answer

Work in Process increases by the standard cost of the standard quantity of raw materials allowed for the actual output, which is SQ × SP = (19,400 units × 3.7 pounds per unit) × $9.00 per pound = 71,780 pounds × $9.00 per pound = $646,020.

Scogin Corporation Uses a Standard Cost System in Which Inventories