Accounting Information Systems
Accounting Information Systems
11th Edition
ISBN: 9781337552127
Author: Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan Hill
Publisher: Cengage Learning
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Chapter 15, Problem 10DQ

A main goal of JIT is zero inventories.

  1. a. Assume your company does not aspire to JIT and has $3,000,000 in raw materials in stock. Identify costs that may be incurred to maintain the inventory level.
  2. b. Now assume that you implement JIT, and your raw materials in stock drop to zero. Explain how you expect this change to impact your income statement and balance sheet.
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