Not sure I understand the concept of Backflushing when using STD Costing. The whole point of using standard costing is variance analysis. Standard costs are “should be” costs which you can then compare against actual costs to see where the variances are and make corrections if variance is unfavorable.
In GP the standard cost of a finished good is calculated using the standard cost of the components on the BOM, and the labor and machine time off the router. Now when backflushing labor and machine time, backflushing will use the same costs off the router so there will be no variances right? So what’s the point of using standard costing? No variance analysis. Am I missing something?