E2-14 JIT and Cost Control

Matsui Industries produces 10,000 units each day, and the average number of units in work
in process is 40,000.
1. Determine the throughput time.
2. If the same daily output can be achieved while reducing the work in process by 75%,
determine the new throughput time.
E2-15 Backflush Costing
GGT Co. uses backflush costing to account for its manufacturing costs. The trigger points are
the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to
account the following:
a) Purchased raw materials, on account, $80,000
b) Requisitioned raw materials to production, $80,000
c) Distributed direct labor costs, $10,000
d) Manufacturing overhead costs incurred, $60,000. (Use Various Credits for the
account in the credit part of the entry.)
e) Completed all of the production started
f) Sold the completed production for $225,000, on account.
(Hint: Use a single account for raw materials and work in process.)
E2-16 Backflush costing
In E2-E15, prepare any journal entries that would have been different if the only trigger
points had been the purchase of materials and the sale of finished goods.
E2-E17 Backflush Costing
DDB Co. uses backflush costing to account for its manufacturing costs. The trigger points are
the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to
account for the following:
a) Purchased eaw materials, on account, $70,000.
b) Requisitioned raw materials to production, $70,000.
c) Distributed direct labor costs, $15,000.
d) Manufacturing overhead costs incurred, $45,000. (Use Various Credits for the account oin
the credit part if the entry.)
e) Completed all of the production started.
f) Sold the completed production for $195,000, on account.
(Hint: Use a single account for raw materials and work in process.)

E2-18 Backflush Costing

In E2-17, prepare any journal entries that would have been different if the only trigger
points had been the purchase of materials and the sale of finished goods.
E2-19 Scrap Materials
 A machine shop manufactures a stainless steel part that is used in an assembled product.
Materials charged to a particular job amounted to %600. At the point of final inspection, it was
discovered that the material used was inferior to the specifications required by the engineering
department; therefore, all units had to be scrapped.
Record the entries required for scrap under each of the following Conditions:
a) The revenue received for scrap is to be treated as a reduction in manufacturing cost
but cannot be identified with a specific job. The value of stainless steel scrap is sold
two months later for cash at the estimated value of $125.
b) Revenue received for scrap is to be treated as reduction in manufacturing cost but
cannot be identified with a specific job. A firm price is not determinable for the
scrap until is sold. It is sold eventually for $75 cash.
c) The production job is a special, and the $85 received on account for the scrap is to
be treated as a reduction in manufacturing cost. (A firm price is not determinable
for the scrap until it is sold, and the amount to be received for the scrap is to be
treated as other income.)