Reference no: EM132548374

The Lead Corporation manufacturers electrical meters. For August, there were no beginning inventories of direct(raw) materials and no beginning and end work in process.

Lead uses a JIT production system and backflush costing with two trigger points for making entries in the accounting system:

Purchase of direct materials debited to inventory: Raw and In- Process Control
Completion of good finished units of product debited to Finished Goods Control and standard costs

Lead August standard costs per unit are direct materials, P25; conversion costs, P20. The following data apply to August manufacturing:

Direct(raw materials purchased) P550,000

Conversion Costs incurred P440,000

Number of finished units manufactured P21,000

Number of finished units sold P20,000

Requirements:

Question 1: Prepare summary journal entries for August (without disposing of under or over allocated conversion costs) Assume no direct materials variances.

Question 2: Post the entries in requirement to T-accounts for applicable Inventory Control, Conversion Costs Control, Conversion Costs Allocated, and Cost of Goods Sold.