Which of the following pertains to a just-in-time production system?
A) Direct materials and work in process are combined into a conversion inventory account.
B) Direct materials and work in process are combined into a raw and in process inventory account.
C) Work in process and conversion costs are combined into a raw and in process inventory account.
D) Direct materials and conversion costs are combined into a raw and in process inventory account.

Question

Quizplus · Accepted Answer

In a just-in-time production system, raw materials and work in process are combined into a single inventory account known as "raw and in process inventory." This allows for a more streamlined and efficient production process, as inventory levels are kept low and only what is needed is produced at any given time. Combining direct materials and work in process into this account is more appropriate than combining either with conversion costs (which represent overhead costs that cannot be directly traced to a specific unit of product).

Which of the Following Pertains to a Just-In-Time Production System