Question
A firm uses backflush costing and values inventory using direct costing . All cost and unit figures below are equal to budgeted amounts. (Treat the
A firm uses backflush costing and values inventory using direct costing. All cost and unit figures below are equal to budgeted amounts. (Treat the units in process as 100% complete.)
DM per unit | 2.25 |
DL per unit | 1.25 |
VOH per unit | 0.65 |
FOH per unit | 0.35 |
Units started | 20000 |
Units unsold | 150 |
Units in process | 100 |
The firm counts raw materials at the end of the period and finds that $50 of direct materials are still in the warehouse. Which journal entry appropriately backflushes costs to inventory accounts?
a. | Debit: COGS $1087.50 Credit: RIP $465.00 Credit: FG $622.50 | |
b. | Debit: COGS $612.50 Credit: RIP $275.00 Credit: FG $337.50 | |
c. | Debit: RIP $465.00 Debit: FG $622.50 Credit: COGS $1087.50 | |
d. | Debit: RIP $275.00 Debit: FG $337.50 Credit: COGS $612.50 |
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