Morning Enterprises produces clocks. It has a JIT assembly process and uses back

Question

Morning Enterprises produces clocks. It has a JIT assembly process and uses backflush costing to record production costs. Overhead is assigned at a rate of $17 per assembly labor hour. There were no beginning inventories in March. During March, the following operating data were generated: Cost of direct materials purchased and used $53,200 Direct labor costs incurred $27,300 Overhead costs assigned ? Assembly hours worked 3,840 hours Ending work in process inventory $1,050 Ending finished goods inventory $960 Using T accounts, show the flow of costs through the backflush costing system. If there is more than one debit or credit for a T-account, enter the amounts in the same order as presented in the data above. If an answer is zero, leave it blank. What is the total cost of goods sold in March?

Explanation / Answer

                    Backflush costing

                                               Cost of goods sold

Particulars                         Debit $                     Particulars                 Credit $

Direct material                    53200                       finished goods               960

Direct labour                       27300                       Work in progress           1050

Overhead (3840hrs* $17)     65280                        Cost of goods sold       143770

                                        145780                                                         145780

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