Select the Incorrect Statement Regarding Service Companies

question 5

Multiple Choice

Select the incorrect statement regarding service companies.

• A) Because service companies do not carry inventory, it is impossible to determine product costs.
• B) Because the products of service companies are consumed immediately, there is no finished goods inventory on their balance sheets.
• C) Managers of service companies are expected to control costs, improve quality, and increase productivity just like managers of manufacturing companies.
• D) Material, labor, and overhead costs of service companies are treated as period costs.

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Definitions:

Implicit Memory

A type of memory that enables us to perform tasks without conscious awareness of these previous experiences.

Clustering

The tendency to remember similar or related items in groups, which is often observed in studies of memory and learning.

Maritime Provinces

A region in eastern Canada consisting of three provinces: New Brunswick, Nova Scotia, and Prince Edward Island, known for their coastlines and maritime culture.

Serial-position Effect

A psychological phenomenon where an individual is more likely to remember the first and last items in a series better than the middle items.