Haupt Inc.manufacturers water pumps.Each pump requires $155 of raw materials and $315 of conversion costs.Each pump is sold for $725.Last month Haupt produced and sold 69 pumps.The journal entry to apply conversion costs to production would include:
A)Debit to work in process inventory of $21,735.
B)Credit to sales of $21,735.
C)Debit to cost of goods sold of $31,735.
D)Credit to work in process inventory of $21,735.
E)Debit to accounts payable of $31,735.

Question

Quizplus · Accepted Answer

The conversion costs for each pump are $315, and Haupt produced and sold 69 pumps. Therefore, the total conversion costs applied to production are 69 pumps * $315/pump = $21,735. This amount would be debited to work in process inventory to reflect the costs being added to the production process.

Haupt IncManufacturers Water Pumps