In a JIT Cost Accounting System

question 36

Multiple Choice

In a JIT cost accounting system

• A) reduced product quality is offset by reduced cost.
• B) manufacturing overhead is applied in the traditional manner.
• C) Raw Materials and Work in Process Inventory accounts are replaced by Raw and In-Process Inventory.
• D) conversion costs are eliminated.

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Definitions:

Economic Losses

Financial deficits incurred by an individual, organization, or economy stemming from events or actions that reduce wealth or resources.

Constant-cost Industry

An industry in which the input prices do not change as the industry output changes, leading to a supply curve that is perfectly elastic.

Price Per Unit

The cost assigned to a single unit of a product or service, used to determine the total price based on the quantity purchased.

Output Increase

The rise in the quantity of goods or services produced by a company or economy over a certain period.