1.) A firm uses backflush costing and values inventory using direct costing. All actual amounts are equal to budgeted amounts. (Note that some of the amounts below are on a per unit basis.)

DM per unit - $2.25 DL per unit - $1.25 VOH per unit - $0.65 FOH per unit - $0.35 Total completed and in process - 20,000 units Units in finished goods - 150 Units in process - 100

The firm counts raw materials at the end of the period and finds that $50 of raw materials are still in the warehouse.

Which journal entry appropriately backflushes costs to inventory accounts?

a.Debit: RIP $225.00 Debit: Conversion Costs $190.00 Debit: FG $622.50 Credit: COGS $1037.50

b.Debit: COGS $1087.50 Credit: RIP $275.00 Credit: Conversion Costs $190.00 Credit: FG $622.50

c.Debit: RIP $275.00 Debit: Conversion Costs $190.00 Debit: FG $622.50 Credit: COGS $1087.50

d.Debit: COGS $1037.50 Credit: RIP $225.00 Credit: Conversion Costs $190.00 Credit: FG $622.50