Which of the Following Statements Is False? the Cost of Rework

question 140

Multiple Choice

Which of the following statements is false? The cost of rework on defective units,if

• A)abnormal,should be assigned to a loss account.
• B)normal and if actual costs are used,should be assigned to material,labor and overhead costs of the good production.
• C)normal and if standard costs are used,should be considered when developing the overhead application rate.
• D)abnormal,should be prorated among Work In Process,Finished Goods,and Cost of Goods Sold.

---

Definitions:

Losses

Losses refer to the amount by which expenses exceed revenues in a particular period, indicating a negative financial performance for a business.

Constant-cost Industry

An industry in which the costs of production, including the prices of raw materials and wages, do not change as the industry's output changes.

Long-run Equilibrium

A state in which all factors of production and costs are variable, allowing for full adjustment to any changes in the market.

Market Price

The price at which goods can be sold or bought in a market, reflecting the supply and demand dynamics at any given time.