Accounting for Product Costs in a JIT Environment

question 142

Multiple Choice

Accounting for product costs in a JIT environment

• A)uses a job order costing system.
• B)classifies processing costs as raw (or direct)material,direct labor,and overhead.
• C)is more complex than in other types of manufacturing environments.
• D)follows process costing procedures whereby costs are accumulated by the process (cell)and attached to units processed for the period.

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Definitions:

Lease Expense

The cost incurred from leasing an asset, including both fixed payments and variable charges over the lease term.

Leveraged Lease

A lease agreement that involves a lessor financing the leased asset through borrowing, with the lease payments covering the loan repayments and providing profit.

Direct Financing Lease

A lease agreement where the lessor records the present value of lease payments as a receivable rather than as a sale or lease revenue.

Lessor

The party in a lease agreement that owns the leased asset and grants the lessee the right to use the asset in exchange for lease payments.