Flying High Manufacturing produces frisbees using a three-step process that includes molding, coloring and finishing. Which of the following accounts is debited for conversion costs?
A)WIP Inventory-Finishing
B)Finished Goods Inventory
C)Raw Materials Inventory
D)Cost of Goods Sold

Question

Quizplus · Accepted Answer

Conversion costs refer to the costs incurred in converting raw materials into finished products. In the case of Flying High Manufacturing, the three-step process of molding, coloring, and finishing incurs conversion costs. Out of the given options, only WIP Inventory-Finishing is a direct account associated with the conversion process. Therefore, it is debited for conversion costs.

Flying High Manufacturing Produces Frisbees Using a Three-Step Process That