Assume the same facts as in Exercise 21.11. Now assume that there is only one trigger point, the completion of good finished units of product, which are debited to Finished Goods Control at standard costs. Any under- or overallocated 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 overallocated conversion costs. Assume no direct materials variances.

2 Post the entries in requirement 1 to the following T-accounts if applicable: Stock Control, Conversion Costs Control, Conversion Costs Allocated and Cost of Goods Sold.

Exercise 21.11

Papadopoulou SA manufactures electrical meters. For August, there were no opening stocks of direct (raw) materials and no opening and closing work in progress. Papadopoulou uses a JIT production system and backflush costing with two trigger points for making entries in the accounting system:

a Purchase of direct materials debited to Stock: Raw and In-Progress Control b Completion of good finished units of product debited to Finished Goods Control at standard costs. Papadopoulou’s August standard costs per unit are direct materials, €25; conversion costs, €20.

The following data apply to August manufacturing:

Transcribed Image Text:

Direct (raw) materials purchased 550 000 Conversion costs incurred 440 000 Number of finished units 21 000 manufactured Number of finished units sold 20 000