Artful Designs uses JIT production in producing designs for dresses. For the month of June, the company
Question:
Artful Designs uses JIT production in producing designs for dresses. For the month of June, the company incurred costs of $500,000 in making designs. Assume the credit entries for these costs when they were recorded during the month were: 40 percent to Accounts Payable and 60 percent to Wages Payable. Ten percent of those costs were tied up in one design for an Italian dressmaker that was not complete at the end of the month, and 20 percent of the costs had been assigned to one design for a dressmaker in Japan that was finished but not yet sold. Artful Designs has no Materials Inventory account, one Work in Process Inventory account, and one Finished Goods Inventory account.
Prepare journal entries to show the flow of costs using backflush costing.
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