Compare just-in-time to a traditional accounting system.Clarion,Inc. ,produces GPS units.The company received an order for 8,000 GPS Units.The company purchased and used $600,000 of materials for this order.The company incurred labor costs of $350,000 and overhead costs of $900,000.The company credits all costs to "Wages and Accounts Payable." The accounting period ended before the company completed the order.The firm had 15 percent of the total costs incurred still in Work-in-Process Inventory and 25 percent of the total costs incurred still in Finished Goods Inventory.
Required:
a.Use journal entries to show the flow of costs using backflush costing.
b.Use journal entries to show the flow of costs using a traditional costing system.
(Compare just-in-time to a traditional accounting system. )

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The Answer of Compare just-in-time to a traditional accounting system.Clarion,Inc. ,produces GPS units.The company received an order for 8,000 GPS Units.The company purchased and used $600,000 of materials for this order.The company incurred labor costs of $350,000 and overhead costs of $900,000.The company credits all costs to "Wages and Accounts Payable." The accounting period ended before the company completed the order.The firm had 15 percent of the total costs incurred still in Work-in-Process Inventory and 25 percent of the total costs incurred still in Finished Goods Inventory.
Required:
a.Use journal entries to show the flow of costs using backflush costing.
b.Use journal entries to show the flow of costs using a traditional costing system.
(Compare just-in-time to a traditional accounting system. )

Compare Just-In-Time to a Traditional Accounting System