Question
In: Accounting
Hepworth Company has implemented a JIT system and is considering the use of backflush costing. Hepworth...
Hepworth Company has implemented a JIT system and is considering the use of backflush costing. Hepworth had the following transactions for the current fiscal year:
1. Purchased raw materials on account for $600,000.
2. Placed all materials received into production.
3. Incurred actual direct labor costs of $90,000.
4. Incurred actual overhead costs of $625,000.
5. Applied conversion costs of $675,000.
6. Completed all work for the month.
7. Sold all completed work.
8. Computed the difference between actual and applied costs.
Required: 1. Prepare the journal entries for traditional and backflush costing. For backflush costing, assume there are two trigger points: (1) the purchase of raw materials, and (2) the completion of the goods.
2. Assume the second trigger point in Requirement 1 is the sale of goods. What would change for the backflush-costing journal entries?
3. What if there is only one trigger point and it is (a) completion of the goods or (b) sale of the goods? How would the backflush-costing journal entries differ from Requirement 1 for (a) and (b)?
Solutions
ekkarill92 answered 9 months agoRelated Solutions
Backflush Costing Hepworth Company has implemented a JIT system and is considering the use of backflush...
Backflush Costing
Hepworth Company has implemented a JIT system and is considering
the use of backflush costing. Hepworth had the following
transactions for the current fiscal year:
Purchased raw materials on account for $370,000.
Placed all materials received into production.
Incurred actual direct labor costs of $55,500.
Incurred actual overhead costs of $385,800.
Applied conversion costs of $417,400.
Completed all work for the month.
Sold all completed work.
Computed the difference between actual and applied costs.
prepare the journal entries...
Backflush Costing Hepworth Company has implemented a JIT system and is considering the use of backflush...
Backflush Costing
Hepworth Company has implemented a JIT system and is considering
the use of backflush costing. Hepworth had the following
transactions for the current fiscal year:
Purchased raw materials on account for $430,000.
Placed all materials received into production.
Incurred actual direct labor costs of $64,500.
Incurred actual overhead costs of $448,200.
Applied conversion costs of $484,600.
Completed all work for the month.
Sold all completed work.
Computed the difference between actual and applied costs.
Required:
1. Prepare the...
Backflush Costing Hepworth Company has implemented a JIT system and is considering the use of backflush...
Backflush Costing
Hepworth Company has implemented a JIT system and is considering
the use of backflush costing. Hepworth had the following
transactions for the current fiscal year:
Purchased raw materials on account for $750,000.
Placed all materials received into production.
Incurred actual direct labor costs of $112,500.
Incurred actual overhead costs of $781,000.
Applied conversion costs of $843,000.
Completed all work for the month.
Sold all completed work.
Computed the difference between actual and applied costs.
Required:
1. Prepare the...
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Activity Cost Pool
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ExpectedActivity
Labor-related
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2,076
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10,500
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