Which of the Following Statements Accurately Describes Manufacturing Cost Flows

question 36

Multiple Choice

Which of the following statements accurately describes manufacturing cost flows in a just-in-time (JIT) environment?

• A) Direct labor and overhead are maintained in a work in process account for long periods of time.
• B) There is little need to maintain a cost of goods sold account.
• C) There is little need to maintain raw materials, work in process, or finished goods accounts.
• D) Manufacturing costs are maintained in the finished goods account for long periods of time.

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Definitions:

Nonlabor Income

Income received that does not come from employment or work, such as investment returns or inheritance.

Wage Rate

The amount of money paid to an employee for a unit of time worked, typically expressed per hour or year.

Leisure

Represents time that an individual spends away from work and other compulsory activities, often used for relaxation, recreation, or personal interests.

Nonlabor Income

Earnings received from sources other than employment, such as investments, pensions, or inheritances.