Johnson Production Company Uses Just-In-Time Production and Accounting Methods

Multiple Choice

Johnson Production Company uses just-in-time production and accounting methods. On June 1, Johnson completed 400 units of product and moved the products to finished goods. Each unit included $8.00 of direct materials cost and $2.00 of conversion costs. Which of the following journal entries correctly records this transaction?

A) Debit $4,000 to Finished goods, credit $4,000 to Raw and in-process inventory.
B) Debit $4,000 to Finished goods, credit $3,200 to Raw and in-process, credit $800 to Conversion costs.
C) Debit $3,200 to Conversion costs, debit $800 to Materials inventory, credit $4,000 to Finished goods.
D) Debit $4,000 to Cost of goods sold, credit $3,200 to Materials inventory, credit $800 to Conversion costs.