Question 1

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

Accepted Answer

The answer of What is a supply chain, and what...

Question 2

Use the information below to answer the following question(s).Fun 'N' Games manufactures various board games.For January there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing. 
-Which of the following journal entries properly records the purchase of direct materials at Fun 'N' Games?

Accepted Answer

The answer of Use the information below to answer the...

Question 3

A trigger point in backflush costing refers to the inventory level at which a reorder is generated.

Accepted Answer

A trigger point in backflush costing refers to the point in the production process where costs are assigned to products, not the inventory level for reorder.

Question 4

Use the information below to answer the following question(s).Fun 'N' Games manufactures various board games.For January there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing. 
-Which of the journal entries properly records the incurrence of conversion costs?

Accepted Answer

The answer of Use the information below to answer the...

Question 5

Use the information below to answer the following question(s).Fun 'N' Games manufactures various board games.For January there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing. 
-Which of the following entries properly records the cost of goods sold for the month?

Accepted Answer

The answer of Use the information below to answer the...

Question 6

Lean accounting is a costing method that supports creating value for customers by costing the value streams, as distinguished from individual products or departments,thereby eliminating waste in the accounting process.

Accepted Answer

Lean accounting focuses on costing value streams instead of individual products or departments, and its aim is to eliminate waste and create value for customers.

Question 7

Traditional budgeted and standard costing systems use

Accepted Answer

Synchronous tracking is a costing method that assigns costs to products or services as they are produced or provided. This method is used in traditional budgeted and standard costing systems.

Question 8

Use the information below to answer the following question(s).Roller Sports Ltd.manufactures various skateboards.For March there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing.Following is financial information for March. 
-Which of the following entries properly records the cost of goods sold for the month?

Accepted Answer

The cost of goods sold is calculated as the sum of direct materials used and conversion costs allocated. As there were no beginning inventories of direct materials and no beginning or ending work-in-process, the total conversion costs allocated for the month represent the conversion costs incurred in production of finished goods. Therefore, the journal entry that properly records the cost of goods sold for the month is the one that includes the total conversion costs allocated. Option B is the only one that meets this criterion.

Question 9

Companies that have fast manufacturing lead times usually find that a version of backflush costing will report cost numbers similar to what a sequential costing approach would report.

Accepted Answer

Backflush costing is a simplified form of costing that is often used in companies with fast manufacturing lead times. It is a form of product costing that is done at the end of a production process, where the total cost of the production process is allotted to the finished goods. This is in contrast to the sequential costing approach, where the cost of each component is tracked separately throughout the production process. Since companies with fast lead times often have streamlined production processes with minimal inventory, the cost allocation done by backflush costing usually closely matches the cost allocation that would be done by sequential costing.

Question 10

Backflush costing describes a costing system that omits recording some journal entries.

Accepted Answer

Backflush costing is a type of costing system that omits recording some journal entries until a later time, such as at the end of a production cycle. This can reduce the complexity and administrative burden of tracking inventory and production costs.

Question 11

A firm using a backflush costing system will always use actual costs rather than standard costs.

Accepted Answer

A firm using a backflush costing system can use standard costs as well as actual costs.

Question 12

Backflush costing uses normal or standard costs.

Accepted Answer

Backflush costing uses normal or standard costs to calculate the cost of goods sold.

Question 13

Use the information below to answer the following question(s).Roller Sports Ltd.manufactures various skateboards.For March there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing.Following is financial information for March. 
-Which of the journal entries properly records the incurrence of conversion costs?

Accepted Answer

The answer of Use the information below to answer the...

Question 14

A positive aspect of backflush costing is the presence of a continuous inventory audit trail.

Accepted Answer

Backflush costing typically lacks a continuous inventory audit trail because it records costs at the end of the production process rather than continuously tracking inventory movements.

Question 15

Answer the following questions using the information below:
Acme Inc.manufactures air compressors.For July there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when units are transferred to finished goods inventory.Acme Inc.uses backflush costing.Variances are written off against Cost of Goods Sold when units are transferred to finished goods inventory.The following data pertains to July:
 
-Which of the following journal entries properly reflects Acme's conversion costs allocated including the disposition of the variance?

Accepted Answer

The allocated conversion cost for July is $830,000 ($400,000 Direct Labor + $430,000 Factory Overhead). The variance of $5,000 (favorable) is written off against Cost of Goods Sold. Therefore, the proper journal entry for the allocation of conversion costs would be:

Work-In-Process Inventory           $825,000
       Factory Payroll                       $400,000
       Factory Overhead                   $430,000
       Indirect Materials                     $5,000
       (To allocate conversion costs for July)

Work-In-Process Inventory           $825,000
       Finished Goods Inventory            $825,000
       (To transfer completed units to finished goods inventory)

Finished Goods Inventory                 Cost of Goods Sold
       $825,000                                       $825,000
       (To write off variance against cost of goods sold)

Question 16

The "flush" in backflush refers to the fact that there are no variances in a backflush costing system using standard costs.

Accepted Answer

The answer of The "flush" in backflush refers to the...

Question 17

Activity-based costing systems enhance backflush costing accounting because of the relatively more accurate budgeted conversion cost per unit for different products.

Accepted Answer

Activity-based costing systems provide more accurate allocation of indirect costs to different products based on their individual activities, leading to a more accurate calculation of the budgeted conversion cost per unit for each product. This enhances the accuracy of the backflush costing accounting method, which uses predetermined standards for the conversion cost per unit to determine the cost of goods sold and inventory valuation.

Question 18

Sequential tracking refers to a method of costing in which the accounting system entries occur at the same order as actual purchases and products.

Accepted Answer

Sequential tracking is a method of costing where the accounting system entries are made in the same order as actual purchases and products. Therefore, the statement is true.

Question 19

Use the information below to answer the following question(s).Roller Sports Ltd.manufactures various skateboards.For March there were no beginning inventories of direct materials, and no beginning or ending work-in-process.Only one indirect manufacturing cost category is currently in use, "Conversion Costs." Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing.Following is financial information for March. 
-Which of the following journal entries properly records the purchase of direct materials at Roller Sports Ltd.?

Accepted Answer

The answer of Use the information below to answer the...

Question 20

Backflush costing is an example of sequential tracking.

Accepted Answer

Backflush costing is a method of costing that delays the recording of costs until after the production process is complete, which is not sequential tracking. Sequential tracking involves recording costs at each stage of production.

Quiz 19: Inventory Cost Management Strategies

What is a supply chain, and what are the benefits of a supply chain analysis? Provide an example of these benefits.

A trigger point in backflush costing refers to the inventory level at which a reorder is generated.

Lean accounting is a costing method that supports creating value for customers by costing the value streams, as distinguished from individual products or departments,thereby eliminating waste in the accounting process.

Traditional budgeted and standard costing systems use

Companies that have fast manufacturing lead times usually find that a version of backflush costing will report cost numbers similar to what a sequential costing approach would report.

Backflush costing describes a costing system that omits recording some journal entries.

A firm using a backflush costing system will always use actual costs rather than standard costs.

Backflush costing uses normal or standard costs.

A positive aspect of backflush costing is the presence of a continuous inventory audit trail.

The "flush" in backflush refers to the fact that there are no variances in a backflush costing system using standard costs.

Activity-based costing systems enhance backflush costing accounting because of the relatively more accurate budgeted conversion cost per unit for different products.

Sequential tracking refers to a method of costing in which the accounting system entries occur at the same order as actual purchases and products.

Backflush costing is an example of sequential tracking.