Final answer:
Backflush Costing is a streamlined cost accounting process used in JIT and Lean manufacturing, eliminating detailed tracking of production costs and delaying inventory entries until the end of the period.
Step-by-step explanation:
The process that eliminates the traditional sequential tracing of costs, where entries to inventory may be delayed until as late as the end of the period, is known as Backflush Costing. This cost accounting system is often associated with Just-In-Time (JIT) inventory systems and Lean manufacturing processes.
It streamlines the accounting process by only recording inventory and cost of sales at the point where the sale occurs, instead of tracking these throughout the production process.
Backflush Costing can simplify the accounting procedures for companies that maintain minimal inventories and focus on efficiency. It avoids the detailed tracking of costs through various stages of production by using standard costs and then making adjustments once the actual costs are known at period-end.