All of the Following Statements About an Operation-Costing System Are

question 62

Multiple Choice

All of the following statements about an operation-costing system are true except:

• A) direct material and conversion costs are traced to each batch of product produced.
• B) direct-material cost is traced to each batch produced.
• C) conversion costs are applied to products on a departmental basis using a predetermined application rate.
• D) batches of product pass sequentially through the same processes.
• E) conversion activities are similar across product lines but direct materials differ significantly.

---

Definitions:

Input Prices

The cost of resources used in the production process.

Market Period

A short time frame in which the supply of a commodity is fixed, typically because the production process cannot be adjusted quickly.

Supply

The total amount of a specific good or service that is available to consumers at various price levels.

Cross Elasticity

A measure of how the demand for one product changes when the price of another product is altered, indicating their substitutability or complementarity.