When Determining the Cost of a Manufactured Good Under an Operation-Costing

question 40

Multiple Choice

When determining the cost of a manufactured good under an operation-costing system, a company would:

• A) trace direct-material cost and actual conversion cost to each product produced.
• B) trace direct-material cost to each product produced and use a predetermined application rate for conversion cost.
• C) trace actual conversion cost to each product produced and use a predetermined application rate for direct material.
• D) use a predetermined application rate for both direct-material cost and conversion cost.
• E) often switch to a job-costing system to simplify recordkeeping procedures.

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