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The following data apply to questions 68. Sit-On-It began operations in January 2008.
The following data apply to questions 68. Sit-On-It began operations in January 2008. Sit-On-It manufactures vehicular seat covers using a just-in-time production system supported by a backflush costing system. This system has two trigger points: (1) the purchase of raw materials, and (2) the sale of finished good units. Standard unit costs are $40 for raw materials and $25 for conversion costs. Sit-On-It writes off any underallocated or overallocated conversion costs immediately. The following data were available for January 2008:Production in good units19,800Sales of good units19,750Purchases of raw materials [20,000 units at $40] $800,000Conversion costs incurred $496,0006.The journal entry to record the manufacture of finished goods units isa.Finished goods control1,287,000Inventory: Raw and in-process control792,000Conversion costs allocated495,000b.Finished goods control1,287,000Conversion cost variance 1,000Inventory: Raw and in-process control792,000Conversion costs control496,000c.Inventory: Raw and in-process control 800,000Conversion costs allocated 495,000Conversion cost variance 1,000Various assets and liabilities 1,296,000d.No entry.7.The January ending total for all inventory balances isa.$16,250.b.$12,250.c.$11,250.d.$10,000.8.The January cost of goods sold isa.$1,283,750.b.$1,284,750.c.$1,286,000.d. $1,296,000.
