Under backflush costing approach where three trigger points are used (stage A, stage C, and stage D), the purchase of materials is:
A) credited to the Materials and In-Process Inventory Control account
B) debited to the Materials and In-Process Inventory Control account
C) debited to the Materials Inventory Control account
D) ignored because the manufacturing process moves so quickly from acquisition of materials to the sale of the finished good

Question

Quizplus · Accepted Answer

Under backflush costing approach, the purchase of materials is debited to the Materials and In-Process Inventory Control account. This account serves as a control account, which accumulates the cost of materials and the cost of converting them into finished goods through the different trigger points.

Under Backflush Costing Approach Where Three Trigger Points Are Used