Kilbuck Manufacturing operates in a lean manufacturing environment. Kilbuck's actual conversion costs for the month of May follow: Direct and indirect labor
$150,000
Machine depreciation
85,000
Maintenance and supplies
60,000
Total conversion costs
$295,000
The journal entry to record May's conversion costs will include:
A) a credit to Work in Process Inventory
B) a debit to Raw Materials Inventory
C) a credit to Raw and In Process Inventory
D) a debit to Raw and In Process Inventory

Question

Quizplus · Accepted Answer

In a lean manufacturing environment, conversion costs are typically debited to the Raw and In Process Inventory account to reflect the costs incurred in the production process.

Kilbuck Manufacturing Operates in a Lean Manufacturing Environment