What is the back-flush costing system and how does it relate to JIT production system?

Costing system for Just-in-Time production systems. Main attributes of the backflush costing system: • Absence of stock makes bookkeeping easier. • Recording is delayed until produced goods appear. • Use of standard/budgeted unit costs (For direct materials and conversion costs). • No record of Work in Progress: No single WIP accounts. There are 3 different versions of backflush costing depending on when journal entries are made. These are also called trigger points. The 3 different trigger points: A. 2 trigger points: Purchase of material, completion of finished goods. B. 2 trigger points: Purchase of material, sale of finished goods. C. 1 trigger point: Completion of finished goods.