Just-In-Time (JIT) System

Flashcards about Just-In-Time (JIT) System and Backflush Costing

Just-In-Time (JIT) System

Involves the elimination of waste and excess by acquiring resources and performing activities only as they are needed by customers at the next stage in the process.

JIT System Requirements

An attitude that places emphasis on cooperation, respect for people, quality at the source, simplification, continuous improvement, and a long-term perspective.

Practices Incorporated in a JIT System

Just-in-time purchasing, focused factories, cellular manufacturing, just-in-time production, just-in-time distribution, simplified accounting, and process-oriented performance measurements.

Backflush Costing

A variety of simplified cost accumulation methods that tend to be used by companies that adopt JIT systems.

Periodic Inventory Systems

Most cost systems that include the backflush method are these type of inventory systems because perpetual inventory records are eliminated.

Raw and in Process

The Materials and Work in Process accounts are combined into an account referred to as this, or RIP.

Conversion Costs

The Direct Labor and Overhead accounts are replaced by this single account.

Cost of Goods Sold

Purchases of direct materials, along with direct labor and overhead costs are charged to this account as incurred.

Backflushed Costs

Costs that are usually based on budgeted or standard costs per unit.

Three Trigger Points

Purchase; Completion; Sale

Two Trigger Points

Purchase; Sale

Ultimate JIT

Sale