Which of the Following Statements Is True of Costing Systems

question 85

Multiple Choice

Which of the following statements is true of costing systems?

• A) A process costing system would be used by manufacturers of custom-made perfumes.
• B) A job order costing system would be used by manufacturers of baking utensils.
• C) A construction company would likely use a process costing system.
• D) An accounting firm would likely use a job order costing system.

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Definitions:

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a certain period of time, indicating the efficiency of inventory management.

Financing Costs

Expenses associated with raising capital through debt or equity.

Obsolescence

The process of becoming outdated or no longer used, often due to technological advances.

Credit Standards

The criteria and measures used by lenders to determine the creditworthiness of potential borrowers.