Which of the Following Is a Reason Traditional Costing Approaches

question 13

Multiple Choice

Which of the following is a reason traditional costing approaches may NOT work in a lean manufacturing environment?

• A)Standard costing variances encourage overproduction.
• B)Distorted product costs may conceal the outcome of success of a lean system.
• C)Traditional operational controls work against demand-pull systems.
• D)all of the above.

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Definitions:

Manufacturing Costs

The total cost related to the production of goods, including raw materials, labor, and overhead expenses.

Variable Costing

A costing method that includes only variable production costs - direct materials, direct labor, and variable manufacturing overhead - in the cost of a product.

Variable Production Costs

Costs that fluctuate with the level of output production, such as raw materials and direct labor.

Variable Costing

An accounting method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product costs.