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:

Pro Forma Statements

Financial statements that project the future financial performance of a company based on current and historical data.

Financial Plans

Structured approaches to managing finances that encompass goals, strategies for achieving them, and an analysis of resources and expenditures.

Future Time Periods

Specific intervals or durations in the future during which certain financial or operational activities are expected to occur.

Capital Intensity Ratio

A metric showing the amount of capital needed per dollar of revenue; high ratios indicate a significant investment in physical capital to generate sales.