Just-In-Time Method

Just-in-Time Lean Company had no beginning inventories because all units in production last year were sold by the end of the year. At the start of this year, the firm received an order for 2,300 items. The company purchased and used $24,100 of materials in production for this order. Direct labor costs of $35,500 and overhead costs of $81,300 were incurred. Goods representing 10% of these costs were still in finished goods Inventory at the end of the period. 1. Use T-accounts and accounting entries to show the flow of costs under a traditional cost system. 2. Use T-accounts and accounting entries to show the flow of costs using a JIT system with backflush costing