JUST IN TIME SYSTEM AND BACKFLUSH ACCOUNTING

Silicon Valley Corporation (SVC), which produces keyboards for personal computers. We assume the following information for SVC for the month of April.

• There are no beginning inventories of direct materials. Moreover, there is zero beginning and ending work in process.
• SVC has only one direct manufacturing cost strategy (direct materials) and one indirect manufacturing cost category (conversion costs). All manufacturing labor costs are included in conversion costs.
• From its bill of materials and an operations list, SVC determines that direct material cost per keyboard unit is P20 and estimated conversion cost is P10.
• SVC purchases P1,880,000 of direct materials. Actual conversion costs equal P1,280,000. SVC produces 90,000 good keyboard units and sells 87,000 units.
• Any under-allocated or over-allocated conversion costs are written off to the Cost of goods sold at the end of the month.

Ready the following (any item may be asked on the online exam i.e. debits and credit of a particular entry)

1. Journal Entries if:
   1. Trigger points Purchase, completion, sale
   2. Purchase, Sale
   3. Completion and sale
2. Provide a General Ledger Overview for each
3. Find the following for each
   1. COGS
   2. RIP end
   3. FG end
   4. Backflushed amount