Backflush versus Traditional Costing: Variations 3 and 4 Potter Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: Raw materials purchased $242,000 42,000 Direct labor cost Overhead cost Conversion cost applied 210,500 273,000* *$42,000 labor plus $231,000 overhead. There were no beginning or ending inventories. All goods produced were sold with a 50 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.)