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Back flush costing similar to Self-Study Problem 2
T. Hilliary, Inc., uses back flush costing to account for its manufacturing costs. The trigger points for recording inventory transactions are the purchase of materials, the completion of products, and the sale of completed products.
Required:
1. Prepare journal entries, if needed, to account for the following transactions.
a. Purchased raw materials on account, $150,000.
b. Requisitioned raw materials to production, $150,000.
c. Distributed direct labor costs, $25,000.
d. Incurred manufacturing overhead costs, $100,000. (Use Various Credits for the credit part of the entry.)
e. Cost of products completed, $275,000.
f. Completed products sold for $400,000, on account. 2. Prepare any journal entries that would be different from the above, if the only trigger points were the purchase of materials and the sale of finished goods.
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Step by stepSolved in 2 steps
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- Compute the total costs of the units (gallons) (a) completed and transferred out to the Packaging Department, and (b) in the Department ending Work-in-Process Inventory. Complete the Production Cost Report that you began in Requirement 1 by calculating the costs per equivalent unit in this step, and then by calculating the the total cost of units completed and transferred out and of units in ending inventory in the following step. (Complete all input fields. Enter a "0" for any zero balances. Round the cost per equivalent unit amounts to the nearest cent and all other amounts to the nearest dollar. Abbreviation used: EUP = equivalent units of production.)arrow_forwardRequired: 1. Compute the amount of (a) production costs transferred from Cutting to Stitching, (b) production costs transferred from Stitching to finished goods, and (c) cost of goods sold. Hint: Compute the total production costs in each department and then subtract the ending inventory to get the amount transferred out of each department. (a) Transferred to work in process-Stitching (b) Transferred to finished goods (c) Cost of goods soldarrow_forwardR.parrow_forward
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