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CMA Final · Strategic Cost Management · Back Flush Accounting

Which feature best describes a backflush costing system compared with a traditional sequential costing system?

A backflush system assigns costs to output after the event, using standard costs at chosen trigger points, with little or no work-in-process tracking. It suits JIT environments with low inventories, unlike traditional systems that record costs at every production stage.

  1. ACosts are tracked through each stage of production using detailed work-in-process records
  2. BCosts are assigned to output after the event, using standard costs at trigger points, with little or no WIP trackingCorrect
  3. CCosts are allocated only on actual consumption recorded at every workstation
  4. DConversion costs are never applied to products

Explanation

Backflush costing works backwards from output at trigger points, using standard costs and eliminating detailed WIP tracking. This suits JIT environments with low inventories. Sequential tracking of each stage is the traditional approach, so the first option is wrong.

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