Low Range produces fleece jackets. The company uses JIT costing for its JIT production system.

Low Range has two inventory accounts: Raw and in-process inventory and Finished goods inventory. On February 1, 2010, the account balances were Raw and in-process inventory, \($13,000\); Finished goods inventory, \($2,000\).

The standard cost of a jacket is \($45\): \($18\) direct materials plus \($27\) conversion costs. Data for February’s activities follow:

Requirements 

1. What are the major features of a JIT production system such as that of Low Range?

2. Prepare summary journal entries for February. Under- or overallocated conversion costs are closed to Cost of goods sold monthly.

3. Use a T-account to determine the February 28, 2010, balance of Raw and in-process inventory.

Transcribed Image Text:

Number of jackets completed Number of jackets sold 16,000 Direct materials purchased 15,600 Conversion costs incurred $ 283,000 $ 533,000