Maple Products Ltd produces hockey sticks. Data for the month of February for production of their top model, the "Canadian Pro D-Lux" is given below. The company uses JIT production and backflush costing with three trigger points for entries in the accounting system:

incurrence of actual materials purchase costs

completion of good output units

sale of finished units

Production data for February:

Standard cost of 1 good unit of output:

direct materials $20 -

conversion costs $25

Raw materials purchased (@ standard) $505,000

Conversion costs incurred $615,000

Good units of output 25,000 Units sold 23,500

REQUIRED:

1. Prepare summary entries under backflush costing for the month of February assuming that the raw materials had additional costs as follows: Unfavourable price variance $2,500 Unfavourable efficiency variance $3,500

2. Assume that all variances and underallocated or overallocated conversion costs are written off monthly to costs of Goods Sold. Prepare the pertinent journal entry

Answer rating: 100% (QA)

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