Backflush, two trigger points, materials purchase and sale. Assume the same facts as in Problem 20-31. Assume that the second trigger point for the Ronowski Company is the sale—

rather than the production—of finished units. Also, the inventory account is confined solely to direct materials, whether they would be in a storeroom, in work in process, or in finished goods.

No conversion costs are inventoried. They are allocated at standard cost to the units sold.

Any under- or overallocated conversion costs are written offmonthly to Cost of Goods Sold.

$6,360,000

$3,696,000 200,000 192,000 Required 1. Prepare summary journal entries forJune, including the disposition of under- or overallo¬

cated conversion costs. Assume no direct materials variances.

2. Post the entries in requirement 1 to T-accounts for applicable Inventory Control, Conversion Costs Control, Conversion Costs Allocated, and Cost of Goods Sold. Explain the composition ofthe ending balance ofInventory Control.

3. Suppose conversion costs were sufficiently material in amount to be included in Inventory Control. Using a backflush system, show how your journal entries would be changed in requirement 1. Explain briefly.