Grist Enterprises Is Converting to an Activity-Based Costing System and Needs

question 78

Multiple Choice

Grist Enterprises is converting to an activity-based costing system and needs to depict the various activities in its manufacturing process along with the activities' relationships.Which of the following is a possible tool that the company can use to accomplish this task?

• A)Storyboards.
• B)Activity relationship charts (ARCs).
• C)Decision trees.
• D)Simulation games.
• E)Process organizers.

---

Definitions:

Raw Materials Inventory

The stock of basic materials that are used in the production process but have not yet been processed.

Raw Material Purchases

The cost associated with acquiring raw materials needed for production.

Credit Sales

Credit sales are transactions where the customer purchases goods or services on account, paying at a future date rather than at the time of purchase.

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold at the end of an accounting period.