A firm uses backflush costing to assign product costs to inventory and values inventory using throughput accounting. All actual amounts are equal to budgeted amounts. The firm has no variable overhead.

Total DM	$1,500
Total DL	$500
Total Fixed OH	$300
Total complete & in process	10,000 units
Ending raw materials	$0

The firm has 35 units in finished goods inventory and 25 units in process.

Which journal entry appropriately backflushes costs to inventory accounts?

Group of answer choices

Debit: RIP $5

Debit: Finished Goods $7

Credit: COGS $12

Debit: COGS $12

Credit: RIP $5

Credit: Finished Goods $7

Debit: RIP $3.75

Debit: Finished Goods $5.25

Credit: COGS $9

Debit: COGS $9

Credit: RIP $3.75

Credit: Finished Goods $5.25