Backflush costing, two trigger points, materials purchase and sale (continuation of 20-23). Assume the same facts as
Question:
Backflush costing, two trigger points, materials purchase and sale (continuation of 20-23). Assume the same facts as in Exercise 20-23, except that Road Warrior now uses a backflush costing system with the following two trigger points:
Purchase of direct materials
Sale of finished goods
The Inventory Control account will include direct materials purchased but not yet in production, materials in work in process, and materials in finished goods but not sold. No conversion costs are inventoried. Any under- or overallocated conversion costs are written off monthly to Cost of Goods Sold.
1. Prepare summary journal entries for August including the disposition of under- or overallocated conversion costs.
2. Post the entries in requirement 1 to T-accounts for Inventory Control, Conversion Costs Control, Costs Allocated, and Cost of Goods Sold.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 978-0136126638
13th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav