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Just-In-Time & Backflush Costing

The document provides information about a JIT costing system used by Hormel Corporation's Food Division for transactions that occurred in March. It details that raw materials costing $97,000 were purchased and used for production which incurred $77,000 in direct labor costs, while actual overhead was $225,000 and applied conversion costs totaled $300,000 including the direct labor. All units were completed.

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Claire Barba
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123 views1 page

Just-In-Time & Backflush Costing

The document provides information about a JIT costing system used by Hormel Corporation's Food Division for transactions that occurred in March. It details that raw materials costing $97,000 were purchased and used for production which incurred $77,000 in direct labor costs, while actual overhead was $225,000 and applied conversion costs totaled $300,000 including the direct labor. All units were completed.

Uploaded by

Claire Barba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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JUST-IN-TIME & BACKFLUSH COSTING

Bee Hon, general manager of Hormel Corporation’s Food Division, has provided the
following information for transactions that occurred during March. This division uses a
JIT costing system.
a. Raw materials were purchased at the cost of P 97,000.
b. All materials purchased were requisitioned for production.
c. Direct labor costs of P 77,000 were incurred.
d. Actual overhead costs amounted to P 225,000.
e. Applied conversion costs totaled P 300,000. This includes P 77,000 of
direct labor.
f. All units were completed.
Required:
1. Journal entries to record under:
A. Traditional Costing
B. Backflush/ JIT costing
2. Determine the March 31 balance in the conversion cost account (indicate
whether overapplied or under applied).
3. Determine the March 31 balance in the Finished Goods account.
4. The amount backflushed from:
A. RIP to Finished Goods
B. Conversion Cost to Finished Goods.

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