JIT Purchasing Is Done Using

question 14

Multiple Choice

JIT purchasing is done using

• A)short-term contracts that emphasize price.
• B)long-term contracts based on quality, reliability, and price.
• C)short-term contracts based on quality, reliability, and price.
• D)inventory to hedge against stockouts and price increases.

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Definitions:

Direct Materials Budget

An estimation of the quantity and cost of direct materials necessary for production, matching the production budget.

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

Production Needs

The requirements necessary to manufacture products, including materials, labor, and machinery.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the sum of beginning inventory plus purchases minus cost of goods sold.