Wheels 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,Wheels Company purchased $6,000 of direct materials and incurred $3,000 in conversion costs to produce 40 bicycles.The journal entry to eliminate the conversion cost variance includes a debit to ________.
A)Finished Goods Inventory for $600
B)Conversion Costs for $600
C)Cost of Goods Sold for $600
D)No entry is needed

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The Answer of Wheels 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,Wheels Company purchased $6,000 of direct materials and incurred $3,000 in conversion costs to produce 40 bicycles.The journal entry to eliminate the conversion cost variance includes a debit to ________.
A)Finished Goods Inventory for $600
B)Conversion Costs for $600
C)Cost of Goods Sold for $600
D)No entry is needed

Wheels Company Uses a Backflush-Costing System to Account for Bicycles