Oniel company began the year with 870,000 of raw materialinventory 1,390,000 of work-in-process inventory and 620,000 offinished goods inventory. During the year, the company purchased3,550,000 of raw materials and used 3,720,000 of raw materials inproduction. Labor used in porduction for the year 2,490,000.Overhead was 1,380,000. Working in process completed andtransferred to finsihed goods inventory was 7,410,000. Cost ofgoods sold for the year was 7,500,000
a. Determine the ending balance in the raw materials,work in process and finsihed goods inventory accounts.
b. Assume O niel practices JIT inventory management. Itsgoal is to reduce inventory levels, improve quality and reducecosts. Comment on O niel success in reducing inventory levels.