The following transactions take place after the implementation of JIT:
1) Materials were purchased on account for $75,000.
2) Materials were placed into production.
3) Actual direct labor costs were $16,000.
4) Actual overhead costs were $30,000.
5) Conversion costs applied were $52,000.
6) All work was completed for the month.
7) All completed work was sold.
8) The variance is recognized.
Which of the following would NOT be an entry under the backflush system, assuming the second trigger point is the completion of goods?

Question

Quizplus · Accepted Answer

Under the backflush system, the entry recorded is a single journal entry to transfer the cost of materials from Materials Inventory to Work-in-Process Inventory when goods are completed. Therefore, option B is the correct choice as it is the only entry that does not fit this characteristic. Option A is the entry for the purchase of materials, option C is the entry for recording direct labor and overhead costs, and option D is the entry for transferring the cost of goods sold from Finished Goods Inventory.

The Following Transactions Take Place After the Implementation of JIT