Aang Inc. is employing a sophisticated JIT system.

The company uses Backflush costing for recording

its production. The following transactions occurred for the Period ended 20x1:
 Purchased P170,000 raw materials on account.
 All materials purchased were requisitioned for production.
 Incurred direct labor costs of P80,000.
 Actual factory overhead costs amounted to P122,000.
 Applied conversion costs totaled P202,000 including direct labor cost of P80,000.
 All units were completed and sold.
What is the cost of goods sold for the year ended December 31, 20x1?
A. 372,000
B. 202,000
C. 250,000
D. 292,000

Zuko Co. is using JIT production system and Backflush Cost Accounting System for the year ended
December 31, 20x1. The following information was provided for the year 20x1:
Raw materials purchased for the year totaled P1,000,000.
Direct labor for the year totaled P500,000.
Actual overhead for the year is P300,000 and the standard overhead rate is 50% of direct labor cost.
The production report showed that the finished goods inventory at year end was P200,000 consisting
of 11% of materials purchased, 12% of direct labor used, and 10% of the actual factory overhead.
What is the Cost of Goods Sold for the year ended December 31, 20x1?
A. P1,600,000
B. P1,550,000
C. P1,800,000
D. P1,750,000

Sokka has a cycle of 3 days, uses a Raw and In Process Accounts (RIP) and charges all conversion
costs to cost of goods sold. At the end of each month, all inventories are counted, conversion costs
components are estimated and inventory account balances are adjusted raw material cost is
backflushed from Raw and In Process (RIP) Account to finished goods. The following information is
provided for the month of August:
Beginning balance of RIP account, including P1,000 of conversion cost P 5,000
Beginning balance of finished goods account, including P6,000 of conversion
10,000
cost
Raw materials received on credit 400,000
Direct labor cost (10,000 hrs) 300,000
Actual factory overhead 492,000
Ending RIP inventory per physical count, including P7,000 conversion cost
6,200
estimate
Ending finished goods inventory per physical count, including P4,000
4,900
conversion cost estimate
Sokka applies factory overhead based on its budget at P50.00 per direct labor hour.

iWhat is the amount of conversion cost included in cost of goods sold?

A. 802,00
B. 796,000
C. 794,000
D. 788,000
What is the amount of direct materials backflushed from RIP to Finished Goods?
A. 391,000
B. 404,000
C. 387,000
D. 395,000

what is the amount of direct materials backflushed from finished goods to cost of goods sold?
A. 395,000
B. 404,000
C. 387,000
D. 395,000

The Katara Manufacturing Company has a cycle time of 1.5 days, uses a Raw and In Process (RIP)
account, and charges all conversion costs to Cost of Goods Sold. At the end of each month, all
inventories are counted, their conversion cost components are estimated, and inventory account
balances are adjusted. Raw material cost is backflushed from RIP to Finished Goods. The following
information is for May:
Beginning balance of RIP account, including P600 of conversion cost P 5,500
Beginning balance of finished goods account, including P2,000 of conversion
6,000
cost
Raw materials received on credit 173,000
Ending RIP inventory per physical count, including P850 conversion cost
6,200
estimate
Ending finished goods inventory per physical count, including P1,550
4,900
conversion cost estimate

iiHow much material cost is backflushed from Raw and In Process Inventory to Finished Goods?
A. 177,900
B. 178,550
C. 172,300
D. 172,550

iiiHow much material cost is backflushed from Finished Goods to Cost of Goods Sold.?
A. 173,200
B. 172,950
C. 179,200
D. 178,550

i
ii
Material in May 1 RIP balance .................................................................................. P 4,900
Material received during May ..................................................................................... 173,000
P 177,900
Material in May 31 RIP, per physical count ................................................................. 5,350
Amount to be backflushed .......................................................................................... P 172,550

iii Material in May 1 finished goods ............................................................................. P 4,000

Material backflushed from RIP .................................................................................... 172,550
P 176,550
Material in May 31 finished goods, per physical count ............................................... 3,350
Amount to be backflushed .......................................................................................... P 173,200