Identify the False Statement Regarding How Product Costs in a Manufacturing

question 126

Multiple Choice

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

• A) Both manufacturing companies and service companies incur costs for supplies.
• B) Manufacturing companies accumulate product costs in inventory accounts, while service companies do not.
• C) Products of service companies such as restaurants are consumed immediately.
• D) Most labor costs for merchandising companies are treated as product costs.

---

Definitions:

Defined Contribution Plan

A retirement plan where an employer, employee, or both make contributions on a regular basis, with future benefits dependent on investment performance.

Risk-free Return

The theoretical return on an investment with no risk of financial loss, typically associated with government bonds.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in finance to gauge the return volatility of an investment.

Defined Contribution Plan

A type of retirement plan where the employee and/or employer contribute a set amount to the employee's individual account during their employment years.