Backflush costing and JIT production. The Rippel Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in process. Rippel uses a JIT production system and backflush costing with three trigger points for making entries in the accounting system:
Purchase of direct materials and incurring of conversion costs
Completion of good finished units of product
Sale of finished goods
Rippel’s August standard cost per meter is direct material, $26, and conversion cost, $19. Rippel has no direct materials variances. The following data apply to August manufacturing:
1. Prepare summary journal entries for August (without disposing of under- or overallocated conversion costs). Assume no direct materials variances.
2. Post the entries in requirement 1 to T-accounts for Materials and In-Process Inventory Control,
Finished Goods Control, Conversion Costs Control, Conversion Costs Allocated, and Cost of GoodsSold.