Which of the Following Statements Is Incorrect for a Manufacturing

question 65

Multiple Choice

Which of the following statements is incorrect for a manufacturing entity?

• A)Inventory is transferred from work in process to finished goods.
• B)Raw materials used are transferred to work in process.
• C)Finished goods inventory eventually becomes cost of goods sold.
• D)Cost of goods sold is recognized when the manufacturing process is complete.

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Definitions:

Production Function

A mathematical model that describes the relationship between inputs used in production and the output of goods or services.

Isoquant

A curve that represents all combinations of inputs that yield the same level of output, illustrating the production possibilities of a firm.

Output

The total amount of goods or services produced by a company, industry, or economy.

Production Function

An equation, table, or graph that indicates the maximum output a firm can produce with a given set of inputs, under certain technological constraints.