Wheel and Sprocket Company Uses a Backflush-Costing System to Account

question 64

Multiple Choice

Wheel and Sprocket Company uses a backflush-costing system to account for bicycles.Bicycles are scheduled for production only after orders are received and products are shipped to customers immediately upon completion.No Finished Goods Inventory is maintained and product costs are applied directly to Cost of Goods Sold.The standard cost for materials is $150 per bicycle.The standard cost for conversion costs is $75 per bicycle.
During the current month,Wheel and Sprocket Company purchased $6,000 of direct materials and incurred $3,000 in conversion costs to produce 40 bicycles.The journal entry for the incurrence of conversion costs includes a Debit to ________.

• A) Finished Goods Inventory for $3,000
• B) Work-In-Process Inventory for $3,000
• C) Conversion Costs for $3,000
• D) Cost of Goods Sold for $3,000

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Definitions:

Action Potential

A rapid increase and decrease in the electrical charge across a cell's membrane, allowing nerve cells to communicate.

Muscle Tension

The force generated by a muscle or group of muscles during contraction, resisting stretching or loading.

Contraction

Contraction refers to the process of muscle fibers shortening in length to produce movement, a response critical for various bodily functions including locomotion and organ operation.

Aerobic Respiration

A metabolic process in cells involving oxygen to convert glucose into energy, producing carbon dioxide and water as byproducts.