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, 2014, the account balances were Raw and In- Process Inventory, $ 7,000; Finished Goods Inventory, $ 2,200. The standard cost of a jacket is $ 37, composed of $ 13 direct materials plus $ 24 conversion costs. Data for February’s activities follow: 

Number of jackets completed …………………………………….................. 20,000

Number of jackets sold (on account, for $ 60 each) ….....…………... 19,600

Direct materials purchased (on account) …………………….....……. $ 257,500

Conversion costs incurred ……………………………………..............……$ 580,000

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. Underallocated or overallocated conversion costs are adjusted to Cost of Goods Sold monthly. 

3. Use a T-account to determine the February 28, 2014, balance of Raw and In- Process Inventory.