CPA REVIEW SCHOOL OF THE PHILIPPINES a fl Manila Advanced Financial Accounting Guerrero/German/DeJesus/Lim/Ferrer/LacolVs ‘Just-in-time and Backflush Costing ‘Part: Theory of Accounts, 1, Whiel ofthe following costs shall be considered as period cos instead of praduct cost? ! ‘8 Fiance cost on inventory loan and foreign exchange differences arising fom : i. Frtightin and insurance while in transit of the raw materials i €. Nonereditable impor duties and irrecoverable value added tx ' 4. Céstof indirect materia used and indirect labor incurred 2 isan imewcry srategy a company employs to naresse efficiency and decrease wastey receiving! and producing goods ar hey are needed in the production process, thereby reducing inventory costs. 4 Justin Time Inventory System i 1. Min.max inventory system ns ¢.Pazeo80-20 inventory rule 4. ABC inventory system i 3. Itis a product costing system generally used in just-instime inventory environment| This costing system delays the coating process until the production of goods is completed by ebiinatng the | deailed tacking of cost throughout the production system and preparing journal ebiies only at trigger points. : 2 Backfush costing ui '. Standard costing ©. Normal cosing 4. Traditional costing i: 4 Which ofthe following statements of service deparment costs alocotionprans a dirét method's 2 Thismetiod alloates each sence dperment trl eats ety the podcon depart, | tod ignores te fc ta secs departs may also provide sevice oor service departments Thistetod is socalled sequential method tha locates the cost of some service feparmedis to other service Hepartments, but once a service department’s costs have been alle no ‘subsequent cost} are allocated back c. This method is'the most accurate of the three methods for allocating service costs, teomse it recognizs reciprocal services among service deparmnens. I se most complicated method, because it requires solving a set of simultaneous linear equati i ‘ 4. None ofthe above ’ 5. Under Jasvin-Time Inventory System and Backflush Costing, what costing melted is ideally employed? 2 Normal costing! i . Actual costing 2. Standard costing : 4. Budgeted costing Bart It: Problem Solving i 1. NESTLE tn. is employing a sophisicated jstntime manufacturing sytem. The company uses buackfush cating for recording is production. The following tansacions occured forthe year ened December 31,2020: #) ‘Purchased P170,000 of raw materials on account. 7 All materials purchased were requisitioned for production. ‘ b . Incurred direct labor costs of P80,000. 1 4. Actual factory overhead costs amounted toP122,000. hea e £ “Applied conversion costs totaled P202,000 including direct labor cost of P80,000. ea All telephones were completed and sold. Fy ds sold for the year eaded December 31, 2020? ‘ 8611rage 4 2. HONDA Inc. is using Just-in-Time Production System and Backflush Cost Accounting System fot the year ended December 31, 2020. The following information was provided forthe year 2020: 4. Raw materials purchased for year 2020 totaled P1,000,000. '. Direct labor forthe year 2020 totaled PSOU,000. Actual cverhead for the year 2020 totaled P300,000 and the standard overhead rate is 50%: Alrect labor cost 4. The production report for year 2020 showed thet the Finished Goods Inventory at December. 8} Was P200,000 consisting of 1 Direct Materials 110,000 i rect Labor 60.000 Factory Overhead 30,000 : ‘What isthe Cost of Goods Sold for the year ended December 31, 2020 ‘ 1,600,000 b. 11350000 © 1,800,000 4. 1,750,000 3. Panay Company has a cycle of 3 days, uses a Raw and In Process Account (RIP) and charges ali conversion costs 10 cost of goods So, A: the end of each momh, all inventories are coutfed, conversion costs components are estimated and inventory account balances are adjusted, Raw material cost is backfushed from Raw and in Process (RIP) Account to finished goods. The following information is provided forthe month of June: ‘Beginning Balance of RIP account, including Pl,000 conversion cost 5,000; Beginning Balance of finished goods account including P6,000 conversion cost 10,000" Rew materiels recived on credit 400,000 Direet inbor cost, 300,000 Factory overhead applied 500,000: Ending RIP inventory per physical count, including P7,000 conversion cost 20,000, Ending finished goods inventory per physical count, including P4,000 conversion cost 6,000 1. What isthe amount of conversion cost inchuded cost of goods sold in June? i a $02,000 ‘ b, 796,000 4 795,006, ei 4. 890,000 4 2 What she amount of crs materiale backs fon RIP finshed gods? a 391,00 aod aoe Le] 387,600 it 4. 395,000 3. What is the amount of dine materials hackflshed ftom finished goods to cast of goods sold? a 395,000 : b. 400,009) i 393,000 : 4. 389,000 tt END