Key Smith Company manufactures all types of locks for exterior doors. All processing is in batches of 100 and is initiated when an order is received. For August there were no beginning inventories. Each type of knob uses the same direct materials although the processing steps are slightly different. Conversion costs and direct materials are the only manufacturing cost accounts. Direct materials are purchased under a just-in-time system. Standard costs and actual costs were the same for the month. Backflush costing is used with purchase and sale trigger points. Additional information for the month is as follows:
Required:
Record all journal entries for the monthly activities related to the above transactions based on backflush costing.

Question

Key Smith Company manufactures all types of locks for exterior doors. All processing is in batches of 100 and is initiated when an order is received. For August there were no beginning inventories. Each type of knob uses the same direct materials although the processing steps are slightly different. Conversion costs and direct materials are the only manufacturing cost accounts. Direct materials are purchased under a just-in-time system. Standard costs and actual costs were the same for the month. Backflush costing is used with purchase and sale trigger points. Additional information for the month is as follows:
  Required:
Record all journal entries for the monthly activities related to the above transactions based on backflush costing.

Quizplus · Accepted Answer

The Answer of Key Smith Company manufactures all types of locks for exterior doors. All processing is in batches of 100 and is initiated when an order is received. For August there were no beginning inventories. Each type of knob uses the same direct materials although the processing steps are slightly different. Conversion costs and direct materials are the only manufacturing cost accounts. Direct materials are purchased under a just-in-time system. Standard costs and actual costs were the same for the month. Backflush costing is used with purchase and sale trigger points. Additional information for the month is as follows:
  Required:
Record all journal entries for the monthly activities related to the above transactions based on backflush costing.

Key Smith Company Manufactures All Types of Locks for Exterior