Select the Incorrect Statement Regarding Cost Flows Through a Job-Order

question 130

Multiple Choice

Select the incorrect statement regarding cost flows through a job-order costing system.

• A) Product costs are accumulated separately by job.
• B) The job-order costing system is patterned after the physical flow of products as they move through the production process.
• C) The three inventory accounts used are maintained on a perpetual basis.
• D) Costs are averaged for all jobs produced within a department.

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Definitions:

Ordering Costs

Expenses associated with making an order for goods or services, including administrative costs, shipping charges, and time spent on ordering processes.

Carrying Costs

Expenses associated with holding inventory, including storage, insurance, and obsolescence.

Gadgets

Small electronic or mechanical devices or tools that are innovative and designed for a particular purpose.

Significant Quantities

Items or entities in considerable amounts that are large enough to warrant attention or impact assessment.