Recording manufacturing costs for a JIT systemLow Range produces fleece jackets. The company uses JIT costing for its JIT production system.Low Range has two inventory accounts: Raw and In-Process Inventory and Finished Goods Inventory. On March 1, 2018, the account balances were Raw and In-Process Inventory, $9,000; Finished Goods Inventory, $1,700.The standard cost of a jacket is $40, composed of $12 direct materials plus $28 conversion costs. Data for March’s activities follow:RequirementsWhat are the major features of a JIT production system such as that of Low Ranger?Prepare -summary journal entries for March Underallocated or overallocated conversion costs are adjusted to Cost of Goods Sold monthly.Use a T-account to determine the March 31, 2018, balance of Raw and In-Process Inventory. Number of jackets completedNumber of jackets sold (on account, for $50 each)Direct materials purchased (on account)Conversion costs incurred15,00014,600$ 177,500$ 521,000

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 8EB: A production department within a company received materials of $7,000 and conversion costs of $5,000...

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Recording manufacturing costs for a JIT system

Low Range produces fleece jackets. The company uses JIT costing for its JIT production system.

Low Range has two inventory accounts: Raw and In-Process Inventory and Finished Goods Inventory. On March 1, 2018, the account balances were Raw and In-Process Inventory, $9,000; Finished Goods Inventory, $1,700.

The standard cost of a jacket is $40, composed of $12 direct materials plus $28 conversion costs. Data for March’s activities follow:

Requirements

What are the major features of a JIT production system such as that of Low Ranger?
Prepare -summary journal entries for March Underallocated or overallocated conversion costs are adjusted to Cost of Goods Sold monthly.
Use a T-account to determine the March 31, 2018, balance of Raw and In-Process Inventory.

Number of jackets completed
Number of jackets sold (on account, for $50 each)
Direct materials purchased (on account)
Conversion costs incurred
15,000
14,600
$ 177,500
$ 521,000

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Number of jackets completed Number of jackets sold (on account, for $50 each) Direct materials purchased (on account) Conversion costs incurred 15,000 14,600 $ 177,500 $ 521,000