Which of the Following Statements Is True

question 23

Multiple Choice

Which of the following statements is true?

• A) Service firms have little need for determining the cost of their services.
• B) The concept of product costing is relevant only for manufacturing firms.
• C) The cost of year-end inventory appears on the balance sheet as an expense.
• D) Service companies use cost information for planning and control purposes.
• E) Mining and petroleum companies have no inventoriable costs.

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Definitions:

Costs Of Quality

The cost associated with controlling quality (prevention and appraisal) and failing to control quality (internal and external failure).

Prevention Costs

Expenditures made to avoid defects in products or inefficiencies in services, part of quality control measures.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing the product's value.

Value-Added

The enhancement a company gives its product or service before offering the product to customers.