Fast & Furious Company Recently Implemented a JIT System and Is

question 53

Essay

Fast & Furious 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 $525,000
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:

Distribution Of Stock

The process of allocating shares of a company to investors or shareholders.

Bringing To The Venture

Bringing To The Venture refers to the various contributions, such as resources, skills, knowledge, and capital, that founders or stakeholders provide to support the growth and sustainability of a new business or project.

Release Of Stock

The process of making shares available to the public for the first time, either through an initial public offering (IPO) or another method.

Time Frame

A period during which certain events or conditions occur or are scheduled to occur.