Accounting for JIT
Vail operates a JIT plant assembling ceiling fans. The Sunset Model ceiling fan has a standard material cost of $28.40, a standard direct labor cost of $14.80, and overhead (fixed and variable) of $16.10. On Monday, a batch of 100 Sunset fans is completed. All of the materials for the 100 fans were on hand prior to Monday and had been previously recorded in the raw and in-process inventory account.
Required:
In analyzing the financial statements of a firm using JIT and another firm in the same industry not using JIT, what differences would you expect to observe?

Question

Quizplus · Accepted Answer

The Answer of Accounting for JIT
Vail operates a JIT plant assembling ceiling fans. The Sunset Model ceiling fan has a standard material cost of $28.40, a standard direct labor cost of $14.80, and overhead (fixed and variable) of $16.10. On Monday, a batch of 100 Sunset fans is completed. All of the materials for the 100 fans were on hand prior to Monday and had been previously recorded in the raw and in-process inventory account.
Required:
In analyzing the financial statements of a firm using JIT and another firm in the same industry not using JIT, what differences would you expect to observe?

Accounting for JIT Vail Operates a JIT Plant Assembling Ceiling Fans. the Sunset