Which of the Following Statements Accurately Describes Manufacturing Cost Flows

question 6

Multiple Choice

Which of the following statements accurately describes manufacturing cost flows in a just-in-time (JIT) environment?

• A) Direct labour and overhead are maintained in a work-in-process account for long periods of time.
• B) There is little need to maintain a cost of goods sold account.
• C) There is little need to maintain raw materials,work-in-process,or finished goods accounts.
• D) Manufacturing costs are maintained in the finished goods account for long periods of time.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to fixed costs and profit.

Sales Volume

The quantity of products or services sold by a business within a specific period.

Contribution Margin

The difference between sales revenue and variable costs, representing the portion of sales revenue that contributes to covering fixed costs and generating profit.

Sales Volume

The quantity of products or services sold within a specific period, critical for revenue and profitability analysis.