A Firm That Has Implemented JIT Had the Following Transactions

question 118

Multiple Choice

A firm that has implemented JIT had the following transactions:
1. Materals were purchased an account for $40,000
2. Materials were placed inta production.
3. Actual direct labour costs were $6,000.
4. Actual averhead costs were $40,000.
5. Conversion costs applied were $42,000.
6. All work was completed for the month.
7. All completed work was sald.
8. The variance is recoprized.
-Refer to the figure.What will be the entry to record materials placed into production using the back flush approach?

• A)\(\begin{array}{ll}
• \text { Materials and In Process Inventory } & 40,000 \\
• \quad \text { Work-in-Process Inventory } &\quad\quad\quad 40,000
• \end{array}\)
• B)\(\begin{array}{llr}
• \text { Materials Inventory } &40,000\\
• \text { Accounts Payable } &&40,000\\
• \end{array}\)
• C)\(\begin{array}{ll}
• \text { Work-in-Process Inventory } & 40,000 \\
• \text { Materials and In Process Inventory }&& 40,000
• \end{array}\)
• D)No entry is required

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Definitions:

LMC

Least Material Condition, a term used in geometric dimensioning and tolerancing indicating the condition of a part when it contains the least amount of material.

Orientation Tolerances

The limits within which the orientation (e.g., parallelism, perpendicularity) of a part feature must lie relative to a specified datum to ensure proper assembly or function.

Perpendicularity

The condition of being exactly at 90 degrees to a given line or surface; a fundamental principle in geometric dimensioning and tolerancing.

Orientation Tolerance

Limits set on the allowable variation in the orientation (tilt or angle) of a feature on a manufactured part relative to its specified orientation.