Esposito,Inc B) $$\begin{array} { | c | l | l | } \hline \text { Conversion Costs } & 708,000 & \\\hline \text { Wages Payable } & & 708,000 \\\hline\end{array}$$

question 59

Multiple Choice

Esposito,Inc.uses a just-in-time costing system.During the month,Esposito incurred $700,000 as direct labor and $8000 as overhead.Wages were not paid.Which of the following is the correct journal entry to record the conversion costs?

• A) \[\begin{array} { | c | l | l | }
• \hline \text { Conversion Costs } & 708,000 & \\
• \hline \text { Wages Payable, Accumulated Depreciation, etc. } & & 708,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | l | l | }
• \hline \text { Conversion Costs } & 708,000 & \\
• \hline \text { Wages Payable } & & 708,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | l | l | }
• \hline \text { Manufacturing Overhead } & 708,000 & \\
• \hline \text { Conversion Costs } & & 708,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | l | l | }
• \hline \text { Conversion Costs } & 708,000 & \\
• \hline \text { Accounts Payable } & & 708,000 \\
• \hline
• \end{array}\]

---

Definitions:

Actively Traded

This describes securities or assets that have high trading volumes and liquidity in financial markets.

Realized Gain

The profit earned from the sale of an asset when the sale price exceeds the purchase price, which has become actual rather than just theoretical.

Fair Market Values

The estimated price at which a property or asset would trade in a competitive auction setting.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.