In an Effort to Improve Its Competitive Position, J

question 130

Essay

In an effort to improve its competitive position, J. J. Borden Company recently introduced Just-in-Time (JIT) production techniques. Its management accountant assembled the following data regarding the recent change:
Inventory financing cost is estimated as 15% per year.
Required:
1. Estimate the net financial benefit (expressed in terms of operating income) that the company realized from the switch to JIT manufacturing.
2. List four (4) nonfinancial benefits the company might expect as a result to its move to JIT.
3. What are the primary expected costs of implementing a JIT system?

---

Definitions:

Reimbursable Expenses

Costs that an employee or business incurs on behalf of a client or company, which are expected to be refunded.

Fraudulent

Involves intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Institute Of Management Accountants

A professional organization focused on advancing the management accounting profession through research, education, and certification programs.

Ethical Professional Practice

The set of principles and standards that guide the behavior and decision-making of professionals to ensure integrity, fairness, and respect.