CUSTOM COST ACCT 2521 SWP W/ ACCESS
17th Edition
ISBN: 9781323674116
Author: Pearson
Publisher: Pearson Custom Publishing
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Textbook Question
Chapter 20, Problem 20.38P
Backflush, two trigger points, materials purchase and sale (continuation of 20-37). Assume the same facts for Acton Corporation as in Problem 20-37, except that now assume Acton uses a JIT production system and backflush costing with two trigger points for making entries in the accounting system:
- Purchase of direct materials
- Sale of finished goods
The inventory account is confined solely to direct materials, whether these materials are in a storeroom, in work in process, or in finished goods. No conversion costs are inventoried. They are allocated to the units sold at standard costs. Any under- or overallocated conversion costs are written off monthly to Cost of Goods Sold.
- 1. Prepare summary
journal entries for August, including the disposition of under- or overallocated conversion costs. Acton has no direct materials variances.
Required
- 2.
Post the entries in requirement 1 to T-accounts for Inventory Control, Conversion Costs Control, Conversion Costs Allocated, and Cost of Goods Sold.
20-37 Backflush costing and JIT production. The Acton Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in process. Acton uses a JIT production system and backflush costing with three trigger points for making entries in the accounting system:
- Purchase of direct materials
- Completion of good finished units of product
- Sale of finished goods
Acton’s August
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Students have asked these similar questions
he following data is provided for Garcon Company and Pepper Company.
Garcon Company
Pepper Company
Beginning finished goods inventory
$
14,500
$
18,250
Beginning work in process inventory
18,200
22,650
Beginning raw materials inventory (direct materials)
9,600
14,400
Rental cost on factory equipment
33,750
23,350
Direct labor
22,600
43,400
Ending finished goods inventory
21,500
15,300
Ending work in process inventory
25,300
21,400
Ending raw materials inventory
7,300
7,400
Factory utilities
11,850
17,500
Factory supplies used (indirect materials)
13,300
5,400
General and administrative expenses
29,500
53,500
Indirect labor
1,950
7,720
Repairs—Factory equipment
5,180
3,800
Raw materials purchases
39,000
53,500
Selling expenses
58,400
49,900
Sales
225,030
317,510…
Under variable costing, which of the following costs would be included in finished goods inventory?
a. salary of vice president of finance
b. wages of carpenters in a furniture factory
c. straight-line depreciation on factory equipment
d. salary of salesperson
Cost behavior refers to the manner in which
a. a cost is used in setting selling prices
b. a cost is estimated
c. a cost is allocated to products
d. a cost changes as the related activity changes
Under variable costing, which of the following costs would not be included in finished goods inventory?
a. direct labor cost
b. fixed factory overhead cost
c. direct materials cost
d. variable factory overhead cost
The following data relate to direct labor costs for February:
Actual costs
7,700 hours at $14.00
Standard costs
7,000 hours at $16.00
What is the direct labor time variance?
a. $7,700 favorable
b. $11,200 unfavorable
c. $11,200 favorable
d. $7,700 unfavorable
Chapter 20 Solutions
CUSTOM COST ACCT 2521 SWP W/ ACCESS
Ch. 20 - Why do better decisions regarding the purchasing...Ch. 20 - Name six cost categories that are important in...Ch. 20 - What assumptions are made when using the simplest...Ch. 20 - Give examples of costs included in annual carrying...Ch. 20 - Give three examples of opportunity costs that...Ch. 20 - What are the steps in computing the cost of a...Ch. 20 - Why might goal-congruence issues arise when...Ch. 20 - JIT purchasing has many benefits but also some...Ch. 20 - What are three factors causing reductions in the...Ch. 20 - You should always choose the supplier who offers...
Ch. 20 - Prob. 20.11QCh. 20 - What are the main features of JIT production, and...Ch. 20 - Distinguish inventory-costing systems using...Ch. 20 - Describe three different versions of backflush...Ch. 20 - Discuss the differences between lean accounting...Ch. 20 - The order size associated with the...Ch. 20 - Prob. 20.17MCQCh. 20 - Prob. 20.18MCQCh. 20 - Lyle Co. has only one product line. For that line,...Ch. 20 - Just-in-time inventory assumes all of the...Ch. 20 - Economic order quantity for retailer. Wonder Line...Ch. 20 - Economic order quantity, effect of parameter...Ch. 20 - EOQ for a retailer. The Fabric World sells fabrics...Ch. 20 - EOQ for manufacturer. Sk8 Company produces...Ch. 20 - Sensitivity of EOQ to changes in relevant ordering...Ch. 20 - JIT production, relevant benefits, relevant costs....Ch. 20 - Backflush costing and JIT production. Grand...Ch. 20 - Backflush costing, two trigger points, materials...Ch. 20 - Backflush costing, two trigger points, completion...Ch. 20 - Prob. 20.30PCh. 20 - Prob. 20.31PCh. 20 - Prob. 20.32PCh. 20 - Prob. 20.33PCh. 20 - JIT purchasing, relevant benefits, relevant costs....Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Supply-chain effects on total relevant inventory...Ch. 20 - Backflush costing and JIT production. The Acton...Ch. 20 - Backflush, two trigger points, materials purchase...Ch. 20 - Backflush, two trigger points, completion of...Ch. 20 - Lean accounting. Reliable Security Devices (RSD)...Ch. 20 - JIT production, relevant benefits, relevant costs,...
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