Which of the following statements best defines backflush costing system?
A) an integrated costing system covering a company's accounting, distribution, manufacturing, purchasing, human resources, and other functions
B) 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
C) 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
D) 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

Question

Quizplus · Accepted Answer

Backflush costing system is a method of costing that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods. Instead, the system waits until the production process is completed and then records all the costs in a single transaction. This method is typically used in JIT (Just-in-Time) inventory systems.

Which of the Following Statements Best Defines Backflush Costing System