COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an integrated costing system covering a company’s accounting, distribution, manufacturing, purchasing, human resources, and other functions
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a costing system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
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a push-through system in which each component in a production line is produced immediately as needed by the next step in the production line
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a costing system that comprises a single database that collects data and feeds it into software applications supporting all of a company’s business activities
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Detailed explanation-1: -Explanation: Backflush costing the costing method where all the transactions related to production and cost are recorded once the product is produced, completed, and sold to the consumer.
Detailed explanation-2: -Backflush costing is a costing system that omits recording some or all of the journal entries relating to the stages from purchase of direct materials to the sales of finished goods.
Detailed explanation-3: -Backflush costing is a product costing system generally used in a just-in-time (JIT) inventory system. In short, it is an accounting method that records the costs associated with producing a good or service only after they are produced, completed, or sold.
Detailed explanation-4: -Traditional normal and standard costing systems use sequential tracking, in which journal entries are recorded in the same order as actual purchases and progress in production, typically at four different trigger points in the process.
Detailed explanation-5: -What is Backflush Accounting? Backflush accounting is when you wait until the manufacture of a product has been completed, and then record all of the related issuances of inventory from stock that were required to create the product.