Deep Freeze produces fleece jackets. The company uses JIT costing for its JIT production system.
Deep Freeze 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, $10,000; Finished goods inventory, $1,600. The standard cost of a jacket is $39, comprised of $16 direct materials plus $23 conversion costs. Data for February€™s activities follow:

Requirements
1. What are the major features of a JIT production system such as that of Deep
Freeze?
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 19,000 Dircct materials purchased 18,600 Conversion costs incurred 538,000 $ 301,500