A firm uses backflush costing to assign product costs to inventory. The firm values inventoryusing throughput accounting.At the beginning of February, the RIP account has a balance of $450. On February 10, the firmpurchased 2,000 lbs of raw materials worth S20,000. At the end of the month, 30 lbs of rawmaterials (worth $300) remain unused. 100 units were in process ($10 material cost per unit)If you searched for the RIP account in the firm's cost accounting records on February 15, whatbalance would that account show?a. $750b. $20,000c. $450

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Description: A firm uses backflush costing to assign product costs to inventory. The firm values inventoryusing throughput accounting.At the beginning of February, the RIP account has a balance of $450. On February 10, the firmpurchased 2,000 lbs of raw material

Raw material can be defined as the basic material that is used for manufacturing the finished goods…

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A firm uses backflush costing to assign product costs to inventory. The firm values inventory using throughput accounting. At the beginning of February, the RIP account has a balance of $450. On February 10, the firm purchased 2,000 Ibs of raw materials worth $20,000. At the end of the month, 30 lbs of raw materials (worth $300) remain unused. 100 units were in process ($10 material cost per unit) If you searched for the RIP account in the firm's cost accounting records on February 15, what balance would that account show? a. $750 b. $20,000 c. $450

A firm uses backflush costing to assign product costs to inventory. The firm values inventory using throughput accounting. At the beginning of February, the RIP account has a balance of $450. On February 10, the firm purchased 2,000 Ibs of raw materials worth $20,000. At the end of the month, 30 lbs of raw materials (worth $300) remain unused. 100 units were in process ($10 material cost per unit) If you searched for the RIP account in the firm's cost accounting records on February 15, what balance would that account show? a. $750 b. $20,000 c. $450

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

A firm uses backflush costing to assign product costs to inventory. The firm values inventory
using throughput accounting.
At the beginning of February, the RIP account has a balance of $450. On February 10, the firm
purchased 2,000 lbs of raw materials worth S20,000. At the end of the month, 30 lbs of raw
materials (worth $300) remain unused. 100 units were in process ($10 material cost per unit)
If you searched for the RIP account in the firm's cost accounting records on February 15, what
balance would that account show?
a. $750
b. $20,000
c. $450

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