Duran Manufacturing Uses a Process Costing System and Manufactures Its

question 120

Multiple Choice

Duran Manufacturing uses a process costing system and manufactures its product in three departments.Which of the following is NOT a way in which Duran can use the cost per unit of each process?

• A) Duran can look for ways to cut the costs when actual process costs are more than planned process costs.
• B) Duran needs to set the selling price to cover the costs of making the product and provide a profit.
• C) Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period.
• D) Duran needs to know the ending balances in the following accounts: Work-In-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

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Definitions:

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individuals' pursuit of self-interest leads to beneficial social outcomes.

Market Behavior

Refers to the aggregate actions and reactions of buyers and sellers in a marketplace, influencing prices, supply, and demand.

Trade

The exchange of goods, services, or both between two or more parties, often internationally or domestically to mutual advantage.

Short-run

A time period in economics during which at least one input, such as factory size or capital, is fixed, and firms can adjust production levels only by changing variable inputs like labor.