=+17-23 KK Backflush costing and JIT production OBJECTIVE 6 Verigon Ltd assembles mobile phones that have scaled-down capabilities of laptop computers. Each mobile phone takes six hours to assemble. Verigon uses a JIT production system and a backflush costing system with three trigger points:

◗ purchase of direct materials

◗ completion of good finished units of product

◗ sale of finished goods.

There are no beginning inventories of finished goods. The following data are for July:

Direct materials purchased 1 750 000 Conversion costs incurred 405 600 Direct materials used 1 740 100 Conversion costs allocated 401 500