44ABC Company uses a backflush costing system with three trigger points:Purchase of direct materialsCompletion of finished unitsSale of finished units The following data are provided for April 2022:Purchase of raw materials – P3,000,000Conversion costs incurred – P800,000 Standard direct material cost is P100 per unit while standard conversion cost is P25 per unit. ABC Company produced 28,500 units and was able to sell 28,300 units. How much is the Raw and In Process account as of the end of April?

The back-flush accounting approach is based on the just-in-time approach and it does not have ending…

Answered: 44 ABC Company uses a backflush…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ABC Company uses a backflush costing system with three trigger points:

Purchase of direct materials
Completion of finished units
Sale of finished units

The following data are provided for April 2022:

Purchase of raw materials – P3,000,000
Conversion costs incurred – P800,000

Standard direct material cost is P100 per unit while standard conversion cost is P25 per unit. ABC Company produced 28,500 units and was able to sell 28,300 units.

How much is the Raw and In Process account as of the end of April?

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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