Select the Incorrect Statement Regarding Service Companies

question 5

Multiple Choice

Select the incorrect statement regarding service companies.

• A) Because service companies do not carry inventory, it is impossible to determine product costs.
• B) Because the products of service companies are consumed immediately, there is no finished goods inventory on their balance sheets.
• C) Managers of service companies are expected to control costs, improve quality, and increase productivity just like managers of manufacturing companies.
• D) Material, labor, and overhead costs of service companies are treated as period costs.

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Definitions:

Handedness

The preference of using one hand over the other for performing tasks; this can be right-handedness, left-handedness, or ambidexterity.

Left-handed

A characteristic of individuals who primarily use their left hand for tasks such as writing and handling tools, often associated with differences in brain structure and function.

Schizophrenia

A severe psychological disorder that is characterized by disturbances in thought and language, perception and attention, motor activity, and mood, and by withdrawal and absorption into daydreams or fantasy.

Intelligence

A complex and controversial concept, defined by David Wechsler as “[the] capacity . . . to understand the world [and the] resourcefulness to cope with its challenges.” Intelligence implies the capacity to make adaptive choices (from the Latin inter, meaning “among,” and legere, meaning “to choose”).