In a JIT cost accounting system
A) reduced product quality is offset by reduced cost.
B) manufacturing overhead is applied in the traditional manner.
C) Raw Materials and Work in Process Inventory accounts are replaced by Raw and In-Process Inventory.
D) conversion costs are eliminated.

Question

Quizplus · Accepted Answer

In a JIT (Just-in-Time) cost accounting system, Raw Materials and Work in Process Inventory accounts are replaced by Raw and In-Process Inventory to reflect the focus on minimizing inventory and improving production flow. This allows for better control and monitoring of inventory levels, which is critical for JIT implementation. Reduction of product quality is not a goal of JIT and should be avoided. Manufacturing overhead is still applied, but in a more calculated and efficient manner. Conversion costs are not eliminated as they are still necessary for the production process.

In a JIT Cost Accounting System