One of the Advantages of the System Replacing the SIC

question 5

Multiple Choice

One of the advantages of the system replacing the SIC is that:

• A) the system will be less expensive to users
• B) the system will cover the United States, Canada, and Mexico
• C) the system will be available on CD-ROM
• D) publication of the system will be outsourced to private industry
• E) the system will use a simpler three-digit code instead of the more complex four-digit system

---

Definitions:

Process Costing

A costing method used in manufacturing where costs are assigned to batches or lots of products, suitable for continuous or repetitive processes.

Conversion Costs

Conversion costs are the costs required to convert raw materials into finished products, including both direct labor costs and manufacturing overhead costs.

Equivalent Units

A concept in cost accounting used to express the amount of work done by an incomplete process on units of output, making partial units comparable to complete units.

Process Costing

An accounting methodology used for homogenous products that averages production costs over all units produced.