Assume that the second trigger point for Acton Corporation is the sale—rather than the completion—of finished goods. Also, the inventory account is confined solely to direct materials, whether these materials are in a storeroom, in work in process, or in finished goods. No conversion costs are inventoried. They are allocated to the units sold at standard costs. Any under- or over allocated conversion costs are written off monthly to Cost of
Goods Sold.
REQUIRED
1. Prepare summary journal entries for August, including the disposition of under- or over allocated conversion costs. Assume no direct materials variances.
2. Post the entries in requirement 1 to T-accounts for Inventory Control, Conversion Costs
Control, Conversion Costs Allocated, and Cost of Goods Sold.