Grand, a unit of Outdoor Garden, manulactures a line of electric, cordless, lawn mowers. Senior management of Outdoor Garden has noticed that Grand has been producing more lawn mowers than it has been selling, and that the unit's inventory has been steadily increasing i (Click the icon to view additional information.) The following data are for Grand for March 2020: Click the loon to view the March diata.) Read the requirements, Requirement 1. Assume that Ralph correctly estimates the standard conversion costs to be $23 and that conversion costs incurred and conversion costs allocated are both equal to 5575,000. Prepare summary joumal entries for March 2020 and post the entries to applicable T-accounts for both methods the current sequential tracking and the backflush costing that senior management of Outdoor Garden is considering. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the entries Outdoor Garden would use for the current sequential tracking, starting with the purchase of direct materials. Journal Entry Accounts Debit Credit Date JE 1 Choose from any list or enter any number in the input fields and then click Check Answer. 7 X i More Info Senior management of Outdoor Garden suspects that the bonus plan in place for the head of Grand is behind this practice. Senior management of Outdoor Garden is contemplating to switch from the current sequential tracking to a backflush costing system in order to stop the overproduction at Grand. Specifically, senior management of Outdoor Garden is considering a backflush costing system with the following two trigger points: Purchase of direct materials Sale of finished goods Each mower takes 2 hours to assemble. There are no beginning inventories of materials or finished goods and no beginning or ending work-in-process inventories. Print Done Data Table or e Direct materials purchased $ 3,010,000 Conversion costs incurred $ 575,000 Direct materials used $ 2,650,000 Conversion costs allocated $ 600,000 nt Grand records direct materials purchased and conversion costs incurred at actual costs. It has no direct materials variances. When finished goods are sold, the backflush costing system "pulls through" standard direct materials cost ($106 per unit) and standard conversion cost ($24 per unit). Grand produced 25,000 finished units in March 2020 and sold 20,800 units. The actual direct materials cost per unit in March 2020 was $106, and the actual conversion cost per unit was $23. Any under-or overallocated conversion costs are written off monthly to Cost of Goods Sold. Ralph, the unit manager of Grand, is concerned that switching to the backflush costing system will lower the operating income of his unit. The senior management at Outdoor Garden tells Ralph that this will only be the case if the standard costs continue to be imprecise estimates of actual costs and that income will remain the same under the proposed backflush costing system if his team can better estimate standard costs. Print Done Requirements X de e 1. Assume that Ralph correctly estimates the standard conversion costs to be $23 and that conversion costs incurred and conversion costs allocated are both equal to $575,000. Prepare summary journal entries for March 2020 and post the entries to applicable T-accounts for both methods the current sequential tracking and the backflush costing that senior management of Outdoor Garden is considering. 2. Is the claim of the senior management at Outdoor Garden correct that Grand's operating income will remain the same under the proposed backflush costing system as long as the standard costs are estimated correctly? Print Done Grand, a unit of Outdoor Garden, manulactures a line of electric, cordless, lawn mowers. Senior management of Outdoor Garden has noticed that Grand has been producing more lawn mowers than it has been selling, and that the unit's inventory has been steadily increasing i (Click the icon to view additional information.) The following data are for Grand for March 2020: Click the loon to view the March diata.) Read the requirements, Requirement 1. Assume that Ralph correctly estimates the standard conversion costs to be $23 and that conversion costs incurred and conversion costs allocated are both equal to 5575,000. Prepare summary joumal entries for March 2020 and post the entries to applicable T-accounts for both methods the current sequential tracking and the backflush costing that senior management of Outdoor Garden is considering. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin by recording the entries Outdoor Garden would use for the current sequential tracking, starting with the purchase of direct materials. Journal Entry Accounts Debit Credit Date JE 1 Choose from any list or enter any number in the input fields and then click Check Answer. 7 X i More Info Senior management of Outdoor Garden suspects that the bonus plan in place for the head of Grand is behind this practice. Senior management of Outdoor Garden is contemplating to switch from the current sequential tracking to a backflush costing system in order to stop the overproduction at Grand. Specifically, senior management of Outdoor Garden is considering a backflush costing system with the following two trigger points: Purchase of direct materials Sale of finished goods Each mower takes 2 hours to assemble. There are no beginning inventories of materials or finished goods and no beginning or ending work-in-process inventories. Print Done Data Table or e Direct materials purchased $ 3,010,000 Conversion costs incurred $ 575,000 Direct materials used $ 2,650,000 Conversion costs allocated $ 600,000 nt Grand records direct materials purchased and conversion costs incurred at actual costs. It has no direct materials variances. When finished goods are sold, the backflush costing system "pulls through" standard direct materials cost ($106 per unit) and standard conversion cost ($24 per unit). Grand produced 25,000 finished units in March 2020 and sold 20,800 units. The actual direct materials cost per unit in March 2020 was $106, and the actual conversion cost per unit was $23. Any under-or overallocated conversion costs are written off monthly to Cost of Goods Sold. Ralph, the unit manager of Grand, is concerned that switching to the backflush costing system will lower the operating income of his unit. The senior management at Outdoor Garden tells Ralph that this will only be the case if the standard costs continue to be imprecise estimates of actual costs and that income will remain the same under the proposed backflush costing system if his team can better estimate standard costs. Print Done Requirements X de e 1. Assume that Ralph correctly estimates the standard conversion costs to be $23 and that conversion costs incurred and conversion costs allocated are both equal to $575,000. Prepare summary journal entries for March 2020 and post the entries to applicable T-accounts for both methods the current sequential tracking and the backflush costing that senior management of Outdoor Garden is considering. 2. Is the claim of the senior management at Outdoor Garden correct that Grand's operating income will remain the same under the proposed backflush costing system as long as the standard costs are estimated correctly? Print Done