Question: High Range produces fleece jackets The company uses JIT costing

High Range produces fleece jackets. The company uses JIT costing for its JIT production system. High Range has two inventory accounts: Raw and In-Process Inventory and Finished Goods Inventory. On February 1, 2016, the account balances were Raw and In-Process Inventory, $13,000; Finished Goods Inventory, $2,000.
The standard cost of a jacket is $36, composed of $16 direct materials plus $20 conversion costs. Data for February’s activities follow:
Number of jackets completed ............ 19,000
Number of jackets sold (on account for $95 each) ..... 18,600
Direct materials purchased (on account) ....... $ 299,000
Conversion costs incurred ............. $ 470,000
Requirements
1. What are the major features of a JIT production system such as that of High Range?
2. Prepare summary journal entries for February. Under-allocated or over-allocated conversion costs are adjusted to Cost of Goods Sold monthly.
3. Use a T-account to determine the February 29, 2016, balance of Raw and In-Process Inventory.

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  • CreatedJune 15, 2015
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