Which of the following is a major difference between the just-in-time (JIT) and traditional approaches to manufacturing? The JIT approach usually involves many suppliers while traditional approaches usually involve only a small number of suppliers. The JIT approach operates with low inventory levels while traditional approaches may operate with high inventory levels. The JIT approach uses a push-through system while traditional approaches use a pull- through system The JIT approach requires centralized purchasing while traditional approaches encourage purchasing decisions by production employees.

Which of the following is a major difference between the just-in-time (JIT) and traditional approaches to manufacturing? The JIT approach usually involves many suppliers while traditional approaches usually involve only a small number of suppliers. The JIT approach operates with low inventory levels while traditional approaches may operate with high inventory levels. The JIT approach uses a push-through system while traditional approaches use a pull- through system The JIT approach requires centralized purchasing while traditional approaches encourage purchasing decisions by production employees.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 75.2C: Inventory Costing When Inventory Quantities Are Small A number of companies have adopted a...

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Inventory Costing When Inventory Quantities Are Small A number of companies have adopted a just-in-time procedure for acquiring inventory. These companies have arrangements with their suppliers that require the supplier to deliver inventory just as the company needs the goods. As a result, just-in-time companies keep very little inventory on hand. Required: Once a company has switched to the just-in-time procedure and has little inventory, should the inventory costing method (LIFO or FIFO) affect cost of goods sold?
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Whenever the units manufactured differ from the units sold, finished goods inventory is affected. In analyzing operating income, such increases and decreases could be misinterpreted as operating efficiencies or inefficiencies. Each decision-making situation should be carefully analyzed in deciding whether absorption or variable costing reporting would be more useful. All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs. The production manager for Saxon, Inc. is worried because the company is not showing a high enough profit. Looking at the income statements on the Absorption Statement and the Variable Statement, he notices that the operating income is higher on the absorption cost income statement. He is considering manufacturing another 10,000 units, up to the company’s capacity for manufacturing, in the coming year. He reasons that this will boost operating income and satisfy…