The Implications of JIT and Backflush Costing Systems for Activity-Based

question 3

Multiple Choice

The implications of JIT and backflush costing systems for activity-based costing systems include:

• A)more of the costs are direct
• B)overhead cost allocations are reduced
• C)Neither of these answers are correct.
• D)Both A and B are correct.

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Definitions:

Post-Closing Trial Balance

A financial report created after closing entries are made, showing all the balances of ledger accounts at the end of an accounting period.

Accumulated Depreciation

The cumulative sum of depreciation costs allocated to a fixed asset from the time of its purchase.

Supplies

Items used in the operations of a business that are consumed or used up in the short term.

Sales Revenues

Sales revenues represent the total amount of money earned by a company from its sales of goods or services before any expenses are deducted.