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Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127

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BuyFindarrow_forward

Accounting Information Systems

11th Edition
Ulric J. Gelinas + 3 others
ISBN: 9781337552127
Textbook Problem

A main goal of JIT is zero inventories.

  1. a. Assume your company does not aspire to JIT and has $3,000,000 in raw materials in stock. Identify costs that may be incurred to maintain the inventory level.
  2. b. Now assume that you implement JIT, and your raw materials in stock drop to zero. Explain how you expect this change to impact your income statement and balance sheet.

a)

Summary Introduction

To determine: The cost that would incur to maintain the inventory level.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

Explanation

Determine the cost that would incur to maintain the inventory level:

It is given that the major goal of JIT (Just-In-Time) process is zero inventories. The firm in which Person X is working has $3,000,000 in raw materials in stock and the firm does not aspire to JIT...

b)

Summary Introduction

To discuss: The given statement.

Introduction:

Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.

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