Which of the Following Factors Would Suggest the Use of a Periodic

question 60

Multiple Choice

Which of the following factors would suggest the use of a periodic inventory system?

• A) A small company.
• B) A high volume of sales and a manual accounting system.
• C) Neither a small company or a high volume of sales and a manual accounting system.
• D) Both a small company and a high volume of sales and a manual accounting system.

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Definitions:

Variable Manufacturing Overhead

Costs that vary with the level of production output, such as supplies and indirect labor expenses, not directly tied to the production volume.

Predetermined Overhead Rate

A calculated rate used to allocate overhead costs to products or cost objects based on a planned level of activity.

Direct Labor-Hours

The aggregate number of hours that workers, who are directly part of producing goods or services, contribute.

Job-Order Costing

A cost accounting system that assigns costs to specific production batches or jobs, enabling the calculation of the cost per job.