An Implication of the Demand-Pull Nature of the JIT Production

question 38

Multiple Choice

An implication of the demand-pull nature of the JIT production process is that

• A)finished goods inventories must be available to meet customer demand,although raw material is delivered on an as-needed basis.
• B)more storage space for inventories is necessary.
• C)finished products are packaged and shipped to customers immediately,thus requiring minimal finished goods inventories.
• D)problem areas become less visible as inventories are reduced.

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Definitions:

Costs Per Equivalent Unit

A method used in process costing that assigns costs to partially completed units of production.

Process Costing

An accounting methodology used for homogeneous products, which assigns average costs to units of output on the basis of the process they undergo.

Weighted-Average Method

An inventory valuation method averaging the cost of goods available for sale and assigning an average cost to each unit.

Assembly Department

A segment within a manufacturing facility where parts are assembled into final products.