MaximumTec Has Implemented JIT Had the Following Transactions

question 75

Essay

MaximumTec has implemented JIT had the following transactions:
1. Materials were purchased on account for $70,000.
2. Materials were placed into production.
3. Actual direct labor costs were $14,000.
4. Actual overhead costs were $50,000.
5. Conversion costs applied were $54,000.
6. All work was completed for the month.
7. All completed work was sold.
8. The variance is recognized.
Required:
a. Provide the journal entries for the above transactions assuming the traditional approach was used.
b. Provide the journal entries for a backflush system assuming the second trigger point is the point when goods are sold.

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Definitions:

Law Of Demand

The economic principle stating that as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa.

Income Increases

A situation wherein individuals or entities experience a rise in their earnings or profits over a certain period.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, in contrast to a normal good.

Law Of Demand

A fundamental principle stating that, all else being equal, as the price of a product decreases, the quantity demanded increases, and vice versa.