Use the Information Below to Answer the Following Question(s)

question 91

Multiple Choice

Use the information below to answer the following question(s) .
Fun 'N' Games manufactures various board games. For January there were no beginning inventories of direct materials, and no beginning or ending work in process. Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing.

-Acme, Inc., manufactures air compressors. For July there were no beginning inventories of direct materials, and no beginning or ending work in process. Only one indirect manufacturing cost category is currently in use, "conversion costs." Journal entries are recorded when materials are purchased and when units are transferred to finished goods. Conversion costs are allocated under backflush costing. Direct materials are budgeted at 5 units per compressor; however, actual results reflect that 6 units were required per compressor. Under allocated or Over allocated Conversion Costs are written off against Cost of Goods Sold on a monthly basis. The difference between actual conversion costs incurred and standard conversion costs allocated is $50,000.
Which of the following journal entries properly reflects Acme's write- off of conversion costs?

---

Definitions:

RRSP

A Registered Retirement Savings Plan, a tax-deferred savings account for Canadians to invest money for their retirement.

Six-month Contributions

Regular payments or deposits made over a six-month period, often related to investments or savings plans.

Ordinary Annuity

Uniform financial contributions dispensed at the end of sequential stages for a prescribed period.

Compounded Annually

Refers to the process of applying interest to both the initial principal and the accumulated interest over the past year.