Question 4

PART B Visi Jelas is a company that makes converter boxes for high-definition televisions. When an order is received, all processing begins. There were no beginning inventories in March. The only manufacturing cost are conversion costs and direct materials. Direct Materials are bought on a just-in-time basis. Backflush costing is used with 3 trigger points. Purchase of direct materials and incurring of conversion costs Completion of good finished units of product Sale of finished goods

Required: a) Prepare all journal entries for the monthly activities related to the above transactions if backflush costing is used (including disposing of under- or overallocated conversion costs). b) "JIT purchasing has many benefits but also some risks." Do you agree? Assess your argument.

APPENDIX