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

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P18-29A Recording manufacturing costs for a JIT costing system [15–25 min]

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

High Point has two inventory accounts: Raw and in-process inventory and
Finished goods inventory. On February 1, 2012, the account balances were Raw and
in-process inventory, $7,000; Finished goods inventory, $2,200.

The standard cost of a jacket is $37, comprised of $13 direct materials plus
$24 conversion costs. Data for February’s activities follow:

Number of jackets completed 20,000

Number of jackets sold 19,600

Direct materials purchased $ 257,500

Conversion costs incurred $ 580,000

Requirements

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

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 29, 2012, balance of Raw and
in-process inventory.