Accounting for JIT Vail Operates a JIT Plant Assembling Ceiling Fans. the Sunset

Essay

Accounting for JIT
Vail operates a JIT plant assembling ceiling fans. The Sunset Model ceiling fam has a standard material cost of $28.40, a standard direct labor cost of $14.80, and overhead (fixed and variable) of $16.10. On Monday, a batch of 100 Sunset fans is completed. All of the materials for the 100 fans were on hand prior to Monday and had been previously recorded in the raw and in-process inventory account.
Required:
a. Describe the accounting entries that are made at the end of Monday to record the assembly of the batch of 100 Sunset fans.
b. In analyzing the financial statements of a firm using JIT and another firm in the same industry not using JIT, what differences would you expect to observe?