Just-in-time methods. McNeal Products uses a just-in-time system. To produce 2,000 units for an order, it purchased and used materials costing $50,000, and incurred other manufacturing costs of $30,000, of which $10,000 was labor. All costs were on account.
After McNeal Products completed production of the 2,000 units and shipped 1,600 units, management needed the Finished Goods Inventory balance for the 400 units remaining in inventory for financial statement preparation. The firm incurred costs evenly across all products.
Show the flow of costs using journal entries and T-accounts using backflush costing.