The Following Transactions Take Place After the Implementation of JIT

question 50

Multiple Choice

The following transactions take place after the implementation of JIT:
1) Materials were purchased on account for $75,000.
2) Materials were placed into production.
3) Actual direct labor costs were $16,000.
4) Actual overhead costs were $30,000.
5) Conversion costs applied were $52,000.
6) All work was completed for the month.
7) All completed work was sold.
8) The variance is recognized.
What will be the entry to record material placed into production using the traditional approach?

• A) Materials and In Process Inventory 75,000
• Work-in-Process Inventory 75,000
• B) Materials Inventory 75,000
• Accounts Payable 75,000
• C) Work-n-Process Inventory 75,000
• Materials and In Process Inventory 75,000
• D) Work-in-Process Inventory 75,000
• Materials Inventory 75,000

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Definitions:

Total Cost

The total expenses involved in creating goods or services, encompassing both constant and fluctuating costs.

Perfectly Competitive Firm

A business that operates in a perfectly competitive market, where it is a price taker due to the presence of many sellers offering homogeneous products.

Marginal Cost

The cost incurred by producing one more unit of a good or service.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.