Direct materials and beginning or ending work in progress

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Backflush costing and JIT production. The Grand Meter Corporation manufactures electrical meters. For August, there were no beginning inventories of direct materials and no beginning or ending work in progress. Grand Meter 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 conversion costs Completion of good finished units of product Sale of finished goods Grand Meter’s August standard cost per meter is direct materials, $25, and conversion cost, $20. Grand Meter has no direct materials variances. The following data apply to August manufacturing: Direct materials purchased $550,000 Conversion costs incurred $440,000 Number of finished units manufactured 21,000 Number of finished units sold 20,000 Prepare summary journal entries for August (include disposing of under- or overallocated conversion costs). Assume no direct materials variances.

Reference no: EM131213832

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