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Backflush Costing

The Clifton Manufacturing Company operates with a cycle time of 1.5 days and utilizes a RIP account for inventory management. In May, various financial figures related to raw materials, direct labor, and factory overhead were provided, along with the need to calculate several costs including direct materials backflushed and adjusted costs of goods sold. The document outlines the necessary journal entries for transactions related to materials receipts and points of sale and production.

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Amii Kei
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21 views1 page

Backflush Costing

The Clifton Manufacturing Company operates with a cycle time of 1.5 days and utilizes a RIP account for inventory management. In May, various financial figures related to raw materials, direct labor, and factory overhead were provided, along with the need to calculate several costs including direct materials backflushed and adjusted costs of goods sold. The document outlines the necessary journal entries for transactions related to materials receipts and points of sale and production.

Uploaded by

Amii Kei
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The Clifton Manufacturing Company has a cycle time of 1.

5 days, uses a Raw and In Process


(RIP) account, and charges all conversion costs to Cost of Goods Sold. At the end of each
month, all inventories are counted, their conversion cost components are estimated, and
inventory account balances are adjusted. Raw material cost is backflushed from RIP to Finished
Goods. The following information is for May:

Beginning balance of RIP account, including P600 of conversion cost P 5,500


Beginning balance of finished goods account, including P2,000 of
conversion cost 6,000
Raw materials received on credit 173,000
Direct labor cost 100,000
Factory overhead control 75,000
Factory overhead applied 70,000
Ending RIP inventory per physical count, including P850 conversion
cost estimate 6,200
Ending finished goods inventory per physical count, including P1,550
conversion cost estimate 4,900

Determine the following:


1. Direct materials backflushed from raw materials and in process to finished goods
2. Direct materials backflushed from finished goods to cost of goods sold
3. Cost of goods manufactured
4. Cost of goods sold, adjusted
5. Raw materials and in process, adjusted
6. Finished goods, adjusted
7. Necessary journal entries- point of sale
8. Necessary journal entries- point of production
9. Necessary journal entries- materials receipt and point of sale
10. Necessary journal entries- materials receipts and point of production

End

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