Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


JIT can afford product costing by showing 1



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21.3
JIT can afford product costing by showing
1
Lower investment in stock.
2
Reductions in carrying and handling costs of stock.
3
Lower investment in plant space for stock and production.
4
Reduction in setup costs and total manufacturing costs.
5
Reductions in costs of waste and spoilage as a result of improved quality.
21.4
Companies adopting backflush costing often meet the following conditions
a
Management wants a simple accounting system.
b
Each product has a set of budgeted or standard costs.
c
Backflush costing yields approximately the same financial results as sequential tracking would generate.
21.5
Backflush costing systems can differ in both the number and the placement of trigger points for making journal entries in the accounting system

Example
Number of journal

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