Under backflush costing approach where three trigger points are used (stage A,stage C,and stage D),the purchase of materials is:
A)credited to the Materials and In-Process Inventory Control account
B)debited to the Materials and In-Process Inventory Control account
C)debited to the Materials Inventory Control account
D)ignored because the manufacturing process moves so quickly from acquisition of materials to the sale of the finished good

Question

Quizplus · Accepted Answer

Under the backflush costing approach with trigger points, the purchase of materials is debited to the Materials and In-Process Inventory Control account at stage A. This is because the actual usage of materials is not recorded until stage C or D when the finished goods are produced. Therefore, the materials used are backed-flushed through the system and recorded at the trigger points. At stage C or D, the in-process inventory for materials is credited and the finished goods inventory is debited.

Under Backflush Costing Approach Where Three Trigger Points Are Used