During the current period, Pensacola Pipe Company paid $39,600 for 30,000 units of material, all of which was immediately put into process. During the period, 14,800 units of output were produced, and 14,500 units were sold. Three hundred units remain in finished-goods inventory. Each unit of output requires two units of material, which has a standard cost of $1.35 per unit of material. Standard variable overhead is $69,600 for 15,000 units of production. The variable-overhead efficiency variance was

$1,800 U, and actual variable overhead was $70,000.

Fixed overhead, which includes all labor costs, is budgeted at $146,000. Actual fixed overhead for the period was $144,100. Fixed overhead is applied to production at $10 per unit of output. All variances are expensed.

Required

a. Show the flow of these costs if the company initially charges all manufacturing costs to Cost of Goods Sold (at standard cost), that is, using backflush standard costing.

b. Show the adjustment that would be made to reflect the ending inventory balances.