A Firm That Has Implemented JIT Had the Following Transactions

question 36

Multiple Choice

A firm that has implemented JIT had the following transactions:
1) Materials were purchased on account for $40,000.
2) Materials were placed into production.
3) Actual direct labor costs were $6,000.
4) Actual overhead costs were $40,000.
5) Conversion costs applied were $42,000.
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 purchases using the traditional approach?

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

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Definitions:

Workforce Availability

The supply of qualified and interested individuals in the labor market capable of filling job positions within an organization.

Hiring Bonuses

A financial incentive offered by employers to new employees as an attraction strategy to join the company.

Feedback

Information provided back to a person or group about their performance or behavior, intended for guidance and improvement.

Task Identity

The degree to which a job involves completing a whole, identifiable piece of work from start to finish, enhancing job satisfaction.