20-32 Backflush costing  and JIT production. The Grand Meter Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in progress. Grand Meter uses a JIT production system and backflush costing with three trigger points for making entries in the accounting system:

Purchase of direct materials and incurring conversion costs

Completion of good finished units of product

Sale of finished goods

 

Grand Meter’s August standard cost per meter is direct materials, $25, and conversion cost, $20. Grand Meter has no direct materials variances. The following data apply to August manufacturing:

   

 Direct materials purchased                 $550,000

            Conversion costs incurred        $440,000

            Number of finished units manufactured     21,000

            Number of finished units sold                      20,000  

 

Prepare summary journal entries for August (without disposing of under- or overallocated conversion costs). Assume no direct materials variances.

Post the entries in requirement 1 to T-accounts for Material and In-Process Inventory Control, Finished Goods Control, Conversion Costs Control, Conversion Costs Allocated and Cost of Goods Sold.