A Firm That Has Implemented JIT Had the Following Transactions

question 103

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 material placed into production using the traditional 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)\(\begin{array}{lc}
• \text { Work-in-Process Inventory } & 40,000 \\
• \quad \text { Materials and In Process Inventory } && 40,000
• \end{array}\)
• D)\(\begin{array}{ll}
• \text { Work-in-Process Inventory } & 40,000 \\
• \text { Materials Inventory } && 40,000
• \end{array}\)

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Definitions:

F.o.b. Shipment

A shipping term indicating that the seller is responsible for the goods until they are loaded on a vehicle for transport, at which point responsibility shifts to the buyer.

Title

A legal term that represents ownership rights to property.

Specific Performance

A legal remedy in contracts law requiring a party to perform their part of the contract, as opposed to paying damages for failing to do so.