A just-in-time strategy eliminates overproduction, which happens when the supply of an item in the market exceeds the demand and leads to an accumulation of unsalable inventories. These unsalable products turn into inventory dead stock, which increases waste and consumes inventory space.

Warehousing is expensive, and excess inventory can double your holding costs. In a just-in-time system, the warehouse holding costs are kept to a minimum. Because you order only when your customer places an order, your item is already sold before it reaches you, so there is no need to store your items for long.

It is an accounting system that waits until all of the production processes are completed before recording any direct material usages.

Which costing method uses the Raw and In-Process account?

Under the periodic inventory system, the purchase of direct and indirect materials is recorded in an account entitled "Purchases".

Achievement of good control of materials inventory keeps costs at minimum level and plant production on a smooth, uninterrupted schedule.

Which of the following concepts in an inventory control system is wrong?

An order is automatically placed when the level of inventory reaches a predetermined order point quantity.

The advantage of this method is that it requires only a minimum of clerical time. Under this method, materials that will be used between the time an order is received and the next order is placed will be on the first bin. When the first bin is emptied, an order is placed and the second bin will be used until the receipt of the shipment.

Effective physical control or safeguarding of materials involve all of the following, except

It is the period between the placement of the order and the receipt of the materials used in production over a period of time.

It is a written request, usually sent to inform the purchasing department of a need for materials or supplies.

When the goods that were ordered are delivered, the receiving department will unpack and count them. Which of the following will be filled-out by the said department?

These are discounts granted to the customers to motivate them to pay promptly.

The freight incurred on the purchase of raw materials is added to the invoice price.

Left-over from the production process that has no further use or resale value and may require cost for their disposal is called

When spoiled units are discovered, they are taken out of production and no further work is performed on them.

The two methods of accounting for defective materials are (choose two answers)

Just-in-time requires raw materials to be delivered at exactly the points they are needed, and just when they are needed to initiate production.