Milman Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Milman had the following transactions:

Required:
1. Prepare the journal entries that would have been made using a traditional accounting approach for cost flows.
2. Prepare the journal entries for the month using backflush costing.

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Raw materials purchased Direct labor cost Overhead cost Conversion cost applied $486,000 81,000 405,000 526,500* *$81,000 labor plus $445,500 overhead. There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recog- nized monthly.)