Purchase of direct materials Completion of good finished units of product Sale of finished goods There are no beginning inventories of materials or finished goods and no beginning or ending work-in- process inventories. The following data are for August 2017: Direct materials purchased $2,958,000 Conversion costs incurred $777,600 Direct materials used $2,937,600 Conversion costs allocated S806,400 Grand Devices records direct materials purchased and conversion costs incurred at actual costs. It has no direct materials variances. When finished goods are sold, the backflush costing system "pulls through" standard direct materials cost ($102 per unit) and standard conversion cost ($28 per unit). Grand Devices produced 28,800 finished units in August 2017 and sold 28,400 units. The actual direct materials cost per unit in August 2017 was $102, and the actual conversion cost per unit was $27. Required 1. Prepare summary journal entries for August 2017 (without disposing of under- or overallocated conver- sion costs). 2. Post the entries in requirement 1 to T-accounts for applicable Materials and In-Process Inventory Control, Finished Goods Control, Conversion Costs Control, Conversion Costs Allocated, and Cost of Goods Sold. 3. Under an ideal JIT production system, how would the amounts in your journal entries differ from those in requirement 1?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Backush costing and JIT production. Grand Devices Corporation assembles handheld computers that have scaled-down capabilities of laptop computers. Each handheld computer takes 6 hours to assemble. Grand Devices uses a JIT
production system and a backush costing system with three trigger points:
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