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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Individuals who generally support progressive reforms, individual rights, and a greater role for government in society for the sake of equality.