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	$1.50
DL per unit	$2.00
VOH per unit	$0.45
FOH per unit	$0.55
Total completed and in process	15,000 units
Units in finished goods	500
Units in process	250

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?

Debit: COGS $3,012.50

Credit: RIP $425

Credit: Conversion Costs $612.50

Credit: FG $1,975

Debit: COGS $3,375

Credit: RIP $375

Credit: Conversion Costs $750

Credit: FG $2,250

Debit: RIP $375

Debit: Conversion Costs $750

Debit: FG $2,250

Credit: COGS $3,375

Debit: RIP $425

Debit: Conversion Costs $612.50

Debit: FG $1,975

Credit: COGS $3,012.50

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