Solarcom uses a JIT production system to manufacture its solar-powered DVD players.

Solarcom has adopted backflushing to streamline its accounting system. It accumulates all conversion costs for the JIT line in one account. These costs are estimated to be €2 million for the current year. Solarcom estimates that it will produce 500,000 DVD players this year. Last week, plant labor was €15,000, and €25,000 of materials were purchased and used to produce 10,000 DVD players. All units were shipped and billed to a major retail chain.

Provide a summary of the accounting entries for last week’s production activities to calculate the Cost of Goods Sold. (Hint: first calculate the overhead rate for the year.

Next determine the total cost for the units produced and shipped.)