Quickie Company Recently Implemented a JIT System and Is Considering

question 24

Essay

Quickie Company recently implemented a JIT system and is considering implementing a backflush costing system.Following are the transactions for the first quarter of the year.
1.purchased raw materials on account for $375,000
2.all materials were received and placed into production
3.actual labor costs of $75,000 were incurred
4.actual overhead costs of $425,000 were incurred
5.conversion costs of $480,000 were applied to production as conversion costs
are recognized quarterly
6.all work was completed for the month
7.all completed work was sold
8.the difference between applied costs and actual costs was determined
Required:
1.Prepare journal entries using variation 2 of backflush costing.
2.Prepare journal entries using variation 4 of backflush costing.

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Definitions:

Starting Materials

The substances used at the beginning of a synthesis or a chemical reaction.

Reactivity

The inclination of a substance to participate in a chemical reaction, alone or in combination with other substances.

Substrates

Materials or substances on which enzymes act or upon which chemical processes occur.

2-Chlorobutane

An organic compound consisting of a four-carbon chain (butane) with a chlorine atom substituted at the second carbon.