Which of the Following Isfalse About Process Costing

question 105

Multiple Choice

Which of the following isfalse about process costing?

• A)Firms collect costs for each unit produced.
• B)Firms accumulate costs in a department or production process during the accounting period
• C)Firms spread costs evenly over the units produced during the period,to determine an average cost per unit.
• D)The equation for determining average unit cost is Total Manufacturing Cost Incurred during the Period divided by Total Units Produced during the period.

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Definitions:

Optimal Distribution Policy

The distribution policy that maximizes the value of the firm by choosing the optimal level and form of distributions (dividends and stock repurchases).

Capital Gains

Capital gains are the profits realized from the sale of assets such as stocks, bonds, or real estate, which exceed the purchase price of these assets.

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.

Stock Splits

A corporate action in which a company divides its existing stock into multiple shares to increase the liquidity of the shares, though the market capitalization remains the same.