Just-in-time costing systems use a combined account for Raw Materials Inventory and Work-in-Process Inventory known as the ________.
A)Raw Materials Inventory account
B)Work-in-Process Inventory account
C)Raw and In-Process Inventory account
D)Process account

Question

Quizplus · Accepted Answer

Just-in-time costing systems use a combined account for Raw Materials Inventory and Work-in-Process Inventory, which is commonly known as the "Raw and In-Process Inventory" account. This is because JIT systems focus on minimizing inventory levels and reducing waste, and combining these two inventory accounts allows for better tracking of materials usage throughout the production process. Option A and B are not the correct choices as they refer to separate accounts for Raw Materials Inventory and Work-in-Process Inventory respectively. Option D is not an appropriate answer as the process account is used to record the costs of a particular production process, rather than for tracking raw materials and work-in-progress inventory.

Just-In-Time Costing Systems Use a Combined Account for Raw Materials