In backflush costing, any remaining balance in the conversion costs account at the end of an accounting period is charged to _____.
A)Cost of Goods Sold
B)Work-in-Process Inventory
C)Finished-Goods Inventory
D)Cost of Goods Sold, WIP Inventory, and Finished-Goods Inventory proportionately

Question

Quizplus · Accepted Answer

In backflush costing, conversion costs are not traced to individual units of production. Instead, they are applied to the production process at the end of the period based on the number of units completed. Any remaining balance in the conversion costs account is then charged to the Cost of Goods Sold account at the end of the accounting period. This is because conversion costs refer to the costs associated with transforming raw materials into finished goods, and any unused or excess conversion costs are essentially a period cost that should be charged to operations.

In Backflush Costing, Any Remaining Balance in the Conversion Costs