Merchandising Companies Do Not Need as Good a System of Internal

question 120

True/False

Merchandising companies do not need as good a system of internal control as service companies.

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Definitions:

Actual Overhead

The real costs incurred for overhead in manufacturing or providing services, as opposed to budgeted or estimated overhead.

Cost Accounting System

A system of accounting for operations that captures and records all costs associated with production activities to evaluate efficiency and manage expenses.

Manufacturing Costs

All expenses directly involved in the production of goods, including raw materials, labor, and factory overhead.

Unit of Product

A single item or article that has been produced or is planned to be produced in a manufacturing or production process.