Fast & Furious Company Recently Implemented a JIT System and Is

Fast & Furious Company recently implemented a JIT system and is considering implementing a backflush costing system. Following are the transactions for the first quarter of the year.
1. purchased raw materials on account for $525,000
2. all materials were received and placed into production
3. actual labor costs of $75,000 were incurred
4. actual overhead costs of $425,000 were incurred
5. conversion costs of $480,000 were applied to production as conversion costs are recognized quarterly
6. all work was completed for the month
7. all completed work was sold
8. the difference between applied costs and actual costs was determined
Required:
1. Prepare journal entries using variation 2 of backflush costing.
2. Prepare journal entries using variation 4 of backflush costing.

Correct Answer:

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