Use the information below to answer the following question(s).Father Time Clock Shop manufactures clocks on an automated assembly line.It utilizes two cost categories: direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.Data for the Assembly Department are:

-Which of the following entries would be made to record the issue of direct materials in the Testing Department, under process-costing?
A)debit to Testing Department assets
B)debit to Testing Department Materials Inventory
C)debit to Work in Process - Testing Department
D)credit to Direct Materials
E)credit to Work in Process - Testing Department

Question

Use the information below to answer the following question(s).Father Time Clock Shop manufactures clocks on an automated assembly line.It utilizes two cost categories: direct materials and conversion costs.Each product must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.Data for the Assembly Department are:
 
-Which of the following entries would be made to record the issue of direct materials in the Testing Department, under process-costing?
A)debit to Testing Department assets 
B)debit to Testing Department Materials Inventory 
C)debit to Work in Process - Testing Department 
D)credit to Direct Materials 
E)credit to Work in Process - Testing Department

Quizplus · Accepted Answer

In process-costing, the direct materials are initially added to the Work in Process account of the relevant department (Assembly Department in this case). Once the product moves to the next department (Testing Department), the cost of direct materials is transferred from the Work in Process account of the Assembly Department to the Work in Process account of the Testing Department. Therefore, the entry to record the issue of direct materials in the Testing Department would be a debit to Work in Process - Testing Department.

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