“Flushing” costs to the end of the production run eliminates the detailed tracking of expenses, such as raw material and labor costs, throughout the manufacturing process, which is a feature of traditional costing systems. Backflush costing is also commonly referred to as backflush accounting. In short, it is an accounting method that records the costs associated with producing a good or service only after they are produced, completed, or sold. Advantages and Disadvantages of Backflush Costingīackflush costing is a product costing approach, used in just-in-time (JIT) operating environments, in which costing is delayed until goods are finished.īackflush costing is a product costing system generally used in a just-in-time (JIT) inventory system.
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