In an intermediate process named Polishing, the costs added to Work-in-Progress (WIP) Inventory-Polishing, during this period are $675 for Direct Material (DM), $525 for salaries and wages payable, and $475 for Manufacturing Overhead (MOH). What will the journal entry to record the incurrence of Conversion Costs (CC) be?

Question

Quizplus · Accepted Answer

To record the incurrence of Conversion Costs, Direct Labor and Manufacturing Overhead should be recorded individually. Therefore, WIP Inventory-Polishing should be debited with a total of $1,000, and Salaries and Wages Payable and Manufacturing Overhead will be credited individually for $525 and $475 respectively.

In an Intermediate Process Named Polishing, the Costs Added to Work-In-Progress