Question: A firm uses backflush costing and values inventory using direct costing . All actual amounts are equal to budgeted amounts. (Note that some of the

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 $15 DL per unit $5 VOH per unit $6 FOH per unit $4 Total completed and in process 20000 units Units in finished goods 150 Units in process 100

The firm counts raw materials at the end of the period and finds that $1,000 of raw materials are still in the warehouse. Which of the following is part of the journal entry to backflushes costs to inventory accounts?

A. Debit: Conversion Costs $1,500

B. Debit: Conversion costs $2,500

C. Debit: RIP $1,500

D. Debit: RIP $2,500

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