In a Just-In-Time Costing System, Any Remaining Balance in the Conversion

question 41

Multiple Choice

In a just-in-time costing system, any remaining balance in the conversion costs account at the end of an accounting period is usually cleared to which account?

• A) Raw and in process inventory
• B) Cost of goods sold
• C) Work in process inventory
• D) Finished goods inventory

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Definitions:

Activity-based Costing (ABC)

A costing method that assigns overhead and indirect costs to related products and services based on their usage.

Overhead Rates

The ratio used to allocate indirect costs to products or services, usually based on direct labor hours, machine hours, or direct labor cost.

Square-foot

A unit of area measurement equal to a square measuring one foot on each side, commonly used in real estate and architecture.

ABC

A refined costing method that determines the cost of activities without distortions and allocates costs based on activities that generate costs in specific products and services.