Chapter 19, Problem 43BP

High Mountain produces fleece jackets. The company uses JIT costing for its JIT production system.

High Mountain has two inventory accounts: Raw and In-Process Inventory and Finished Goods Inventory. On April 1, 2018, the account balances were Raw and In-Process Inventory, $10,000; Finished Goods Inventory, $2,100.

The standard cost of a jacket is $33, composed of $12 direct materials plus $21 conversion costs. Data for April’s activities follow:

Requirements

1. 1. What are the major features of a JIT production system such as that of High Mountain?
2. 2. Prepare summary journal entries for April. Underallocated or overallocated conversion costs are adjusted to Cost of Goods Sold monthly.
3. 3. Use a T-account to determine the April 30, 2018, balance of Raw and In-Process Inventory.