Ventura Uses a Just-In-Time (JIT) Manufacturing System for All Its

question 80

Multiple Choice

Ventura uses a just-in-time (JIT) manufacturing system for all its materials, components, and products. The master budget of the company for June called for use of 11,000 square feet of materials, while the flexible budget for the actual output of the month had 10,000 square feet of materials at a standard cost (SP) of $9.60 per square foot. Company records show that the actual price paid (AP) for the materials used in June was $9.50 per square foot, and that the direct materials purchase-price variance for the month was $1,040.

The actual total quantity of materials purchased during the month, rounded to the nearest whole number, was:

• A) 10,000 square feet.
• B) 10,400 square feet.
• C) 11,000 square feet.
• D) 13,840 square feet.
• E) 14,880 square feet.

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Definitions:

Partial Equity Method

An accounting method used when an investing company has significant influence over, but not full control of, another company, requiring the investor to record its share of profits.

Equity Method

The Equity Method is an accounting technique used to record investments in other companies, recognizing the income earned from the investment proportional to ownership.

Dividends

Cash disbursements issued to shareholders by a company, commonly originating from the organization's earnings.

Total Assets

The sum of all resources owned or controlled by a company, valued in terms of money, which can be used to produce goods or services.