A Firm That Has Implemented JIT Had the Following Transactions

question 95

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 backflush 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:

Second Job

Additional employment taken by an individual besides their primary job, often to supplement income.

Full Time

Employment status in which an individual works a minimum number of hours defined by their employer, typically at least 35 to 40 hours per week.

Business Profits

The financial gain made by a business, which is the excess of revenues over expenses.

Partners

Individuals or entities that collaborate in a business venture, sharing both the risks and rewards associated with the business.