5
JIT Chapter - Journal Enties - back flush method
Appendix 5A
Page 266
CC = Direct Labor & Overhead
CC
18,540,000 18,000,000
540,000
BB
DM
Raw & In process
100,000
3,020,000
3,000,000
BB
Finished Goods
900,000 20,510,000
21,000,000
540,000
0
120,000
0
1 purchase 3,020,000 of Direct Materials
Cost of Good Sold
Raw & In Process
Accunts Payables
3,020,000
3,020,000
20,510,000
540,000
2. Mintel Incurs (means incurs actual costs) of Labor and overhead
0
Conversion Costs
Accumulated Depreciation
Wages Payable
Property Tax Payable
Inusurance Payable
18,540,000
5,000,000
11,000,000
2,000,000
540,000
3. completes Intel 3,0000,000 circuits
Allocate DM to Finished Goods
Allocate CC to Finished Goods
# Units
3,000,000
3,000,000
(Every unit - allocate $1.00 of DM)
(Every unit - allocate $6.00 of CC)
Total Unit Cost =
$7.00)
Alloc per
Unit
1
6
3,000,000 DM Allocation
18,000,000 CC Allocation
Finished Goods
Raw & In Process
Conversion Costs
21,000,000
3,000,000
18,000,000
4. Sell 2,930,000 at a cost of $7.00 per unit
Cost of Good Sold
Finished Goods
20,510,000
20,510,000
5. Close out Conversion Cost T- account
Cost of Good Sold
Conversion Costs
540,000
540,000