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.

---

Definitions:

Somatic Symptom Disorder

A mental health condition marked by an excessive focus on physical symptoms that cause major emotional distress and difficulties in daily functioning.

Prescription Medication

Drugs and treatments that are prescribed by healthcare professionals to diagnose, treat, or prevent illness and disease, available only with a valid prescription.

Antidepressant Medications

Drugs prescribed to alleviate symptoms of depression by altering brain chemistry, often impacting serotonin and norepinephrine levels.

Narcotic Analgesics

A class of drugs that are used to relieve pain by acting on the central nervous system, often having potential for abuse and addiction.