Computed the difference between actual and applied costs

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Reference no: EM13343410

Cornestone 11-5 (Chapter 11-Strategic Cost Management)

1. Prepare the j entries for traditional and backflush costing. For backflush costing, assume there are 2 trigger points: 1). the purchase of raw materials and 2). the completion of the goods.
2. Assume the second trigger point in Requirement 1 is the sale of goods. What would change for the backflush costing journal entries?
3.What if there is only one trigger point and it is (a) completion of the goods or (b) sale of goods? how would the backflush costing journal entries differ from Requirment 1 for (a) and (b)?

Hepworth company has implemented a JIT system and is considering the use of backflush costing. Hepworth had the following transactions for the current fiscal year:

1. Purchased raw materials on account for $600 000
2.Placed all materials received into production
3.Incurred actual direct labor costs of $90000
4.Incurred actual overhead costs of $625 000
5.Applied conversion cost of $675000
6.Completed all work for the month
7.Sold all completed work
8.Computed the difference between actual and applied costs.

 

Reference no: EM13343410

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