(a) Explain the term ‘backflush accounting’ and the circumstances in

(a) Explain the term ‘backflush accounting’ and the circumstances in which its use would be appropriate.
(b) CSIX Ltd manufactures fuel pumps using a just-in-time manufacturing system which is supported by a backflush accounting system. The backflush accounting system has two trigger points for the creation of journal entries.
These trigger points are:
The purchase of raw materials
The manufacture of finished goods
The transactions during the month of November were as follows:
Purchase of raw materials ……………….£5,575 000
Conversion costs incurred:
Labour …………………………………………….£1,735,000
Overheads ……………………………………….£3,148,000
Finished goods completed (units) …………210,000
Sales for the month (units) …………………..206,000
There were no opening inventories of raw materials, work in progress or finished goods at 1 November. The standard cost per unit of output is £48. This is made up of £26 for materials and £22 for conversion costs (of which labour comprises £8.20).

Required:
(i) Prepare ledger accounts to record the above transactions for November.
(ii) Briefly explain whether the just-in-time system operated by CSIX Ltd can be regarded as ‘perfect’.

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