________ Is Part of the ________ Process and Occurs When

question 6

Multiple Choice

________ is part of the ________ process and occurs when the company is trying to increase its inventory.

• A) Make-to-order; procurement
• B) Make-to-order; production
• C) Make-to-stock; procurement
• D) Make-to-stock; production

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of production costs.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for inventory valuation.

Process Costing System

A financial recording method for allocating expenses to identical items that are manufactured in bulk through an uninterrupted process.

Weighted-Average Method

A costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighting by the number of units.