Johnson Production Company Uses Just-In-Time Production and Accounting Methods

question 54

Essay

Johnson Production Company uses just-in-time production and accounting methods. On June 1, Johnson sold 200 units of product for $12.00 per unit. Each unit included $8.00 of direct materials cost and $2.00 of conversion costs. Johnson recorded the revenues of $2,400 in one entry, and then recorded the cost of goods sold in a second entry. Please provide the journal entry to record the cost of goods sold.

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Definitions:

Inferior Good

Goods whose demand declines as consumer income rises, distinct from normal goods where demand increases with higher income.

Buyers' Incomes

The total earnings of consumers which influence their purchasing power and demand in the marketplace.

Rightward Shift

In economic graphs, a movement to the right of a curve, indicating an increase in supply or demand depending on the context.

Home-Delivered Pizza

Pizza that is made and delivered directly to a customer's home by a restaurant or pizza delivery service.