Dutch Oven is a bakery company. All processing is in batches of 6 dozen. For March, there were no beginning inventories. Conversion costs and direct materials are the only baking cost accounts. Direct materials are purchased under a just-in-time system.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Dutch Oven is a bakery company. All processing is in batches of 6 dozen. For March, there were no beginning inventories. Conversion costs and direct materials are the only baking cost accounts. Direct materials are purchased under a just-in-time system. The company uses backflush costing with three trigger points: at purchase of raw materials, completion of finished goods, and sale of finished goods. Additional information for the month is as follows:\\nRequired:\\nRecord all journal entries for the monthly activities related to the above transactions assuming that backflush costing is used. The company uses a standard costing system for recording the purchase and use of direct materials; and, the recording of conversion costs. Material price variances are recorded at the time of purchase then closed to cost of goods sold; all other variances are recorded at the completion of finished goods trigger point as a direct charge, or credit to Cost of Goods Sold.Actual direct materials\\n$82,000\\nActual conversion costs\\n$65,000\\nStandard materials cost per batch\\n$10.00\\nStandard conversion cost per batch\\n$8.00\\nBatches produced\\n8,000\\nBatches sold\\n7,500

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