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The following data apply to questions 68. Sit-On-It began operations in January 2008.

The following data apply to questions 68.

Sit-On-It began operations in January 2008. Sit-On-It manufactures vehicular seat covers using a just-in-time production system supported by a backflush costing system. This system has two trigger points: (1) the purchase of raw materials, and (2) the sale of finished good units. Standard unit costs are $40 for raw materials and $25 for conversion costs. Sit-On-It writes off any underallocated or overallocated conversion costs immediately. The following data were available for January 2008:

Production in good units19,800
Sales of good units19,750
Purchases of raw materials [20,000 units at $40] $800,000
Conversion costs incurred $496,000

6.The journal entry to record the manufacture of finished goods units is
a.Finished goods control1,287,000
Inventory: Raw and in-process control792,000
Conversion costs allocated495,000
b.Finished goods control1,287,000
Conversion cost variance 1,000
Inventory: Raw and in-process control792,000
Conversion costs control496,000
c.Inventory: Raw and in-process control 800,000
Conversion costs allocated 495,000
Conversion cost variance 1,000
Various assets and liabilities 1,296,000
d.No entry.

7.The January ending total for all inventory balances is
a.$16,250.
b.$12,250.
c.$11,250.
d.$10,000.

8.The January cost of goods sold is
a.$1,283,750.
b.$1,284,750.
c.$1,286,000.
d. $1,296,000.


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