A Firm That Has Implemented JIT Had the Following Transactions

question 145

Multiple Choice

A firm that has implemented JIT had the following transactions: What will be the entry to record material placed into production using the traditional approach?

• A) Materials and In Process Inventory 40,000 Work-in-process Inventory 40,000
• B) Materials Inventory 40,000 Accounts Payable 40,000
• C) Work-in-Process Inventory 40,000 Materials and In Process Inventory 40,000
• D) Work-in-Process Inventory 40,000 Materials Inventory 40,000

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Definitions:

Complement

Goods or services that are used together with the primary product, increasing the value or utility of the primary product.

Market Price

The price at which a product or service is traded in the marketplace, determined by supply and demand.

Market Clearing Level

The price and quantity at which supply equals demand, so there is no surplus or shortage in the market.

Surplus

Situation in which the quantity supplied exceeds the quantity demanded.