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9212 - Just in Time and Backflush Costing
9212 - Just in Time and Backflush Costing
Manila
2. It is a product costing system generally used in just-in-time inventory environment. This costing
system delays the costing process until the production of goods is completed by eliminating the
detailed tracking of cost throughout the production system and preparing journal entries only at
trigger points.
A. Normal costing
B. Standard costing
C. Backflush costing
D. Traditional costing
4. Which of the following is to be expected when a traditional manufacturing firm shifts to a just in
time system?
A. Idle time will increase
B. Carrying costs will increase
C. Number of suppliers will increase
D. Quality of products will increase
5. Which costing method is the most appropriate when using backflush costing in a just-in-time
inventory system?
A. Normal costing
B. Actual costing
C. Standard costing
D. Budgeted costing
9212
Page 2
1. Timberlake Manufacturing Corp uses a JIT production system. The following transactions
transpired during the year ended December 31, 2023:
a. Purchased raw materials account on account, P1,500,000
b. Only P10,000 materials were left unused by the end of the year
c. Actual direct labor costs of P700,000 were incurred.
d. Actual factory overhead costs totaled P500,000.
e. P1,200,000 conversion costs were applied to production.
f. All units were completed and sold with the exception of P20,000 left in finished goods
inventory.
1. Assuming first that the company uses a traditional costing method, the entry to record
the purchase will include:
A. Debit to raw materials, P1,500,000
B. Debit to raw materials and in process, P1,500,000
C. Debit to finished goods, P1,500,000
D. No entry
2. Assuming that the company uses a backflush costing system with three trigger points,
the entry to record the purchase will include:
A. Debit to raw materials, P1,500,000
B. Debit to raw materials and in process, P1,500,000
C. Debit to finished goods, P1,500,000
D. No entry
3. Assuming that the company uses a backflush costing system with two trigger points,
with purchase as one of the trigger points, the entry to record the sale will include:
A. No entry
B. Debit to finished goods, P20,000
C. Debit to finished goods, P2,690,000
D. Debit to cost of goods sold, P2,690,000
4. Assuming that the company uses a backflush costing system with two trigger points,
with production completion as one of the trigger points, the entry to record the sale will
include:
A. No entry
B. Debit to finished goods, P20,000
C. Debit to finished goods, P2,690,000
D. Debit to cost of goods sold, P2,670,000
5. Assuming that the company uses a backflush costing system with only one trigger point,
the entry to record the sale will include:
A. Debit to raw materials and in process, P10,000
B. Debit to finished goods, P20,000
C. Debit to cost of goods sold, P2,670,000
D. All of the above
9212
Page 3
2. Bieber Productions Incorporated uses a backflush costing system. At the end of each month, all
inventories are counted, conversion costs components are estimated, and inventory account
balances are adjusted. Raw material cost is backflushed from the raw materials and in process
account to the finished goods account. The following information is provided for the month of
December:
1. How much direct materials were backflushed from RIP to finished goods?
A. 816,000
B. 819,000
C. 1,007,000
D. 1,826,000
2. How much direct materials were backflushed from finished goods to cost of goods
sold?
A. 816,000
B. 819,000
C. 1,007,000
D. 1,826,000
END
9212