High Point produces fleece jackets. The company uses JIT costing for its JIT production system.
High Point has two inventory accounts: Raw and in-process inventory and Finished goods inventory. On February 1, 2012, the account balances were Raw and in-process inventory, $7,000; Finished goods inventory, $2,200. The standard cost of a jacket is $37, comprised of $13 direct materials plus $24 conversion costs. Data for February€™s activities follow:

Requirements
1. What are the major features of a JIT production system such as that of High Point?
2. Prepare summary journal entries for February. Under- or overallocated conversion costs are closed to Cost of goods sold monthly.
3. Use a T-account to determine the February 29, 2012, balance of Raw and in-processinventory.

Transcribed Image Text:

Number of jackets completed Number of jackets sold 20,000 Diroct materials purchased 19,600 Conversion costs incurred $ 257,500 $ 580,000