ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an integrated costing system covering a company’s accounting, distribution, manufacturing, purchasing, human resources, and other functions
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a costing system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
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a push-through system in which each component in a production line is produced immediately as needed by the next step in the production line
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a costing system that comprises a single database that collects data and feeds it into software applications supporting all of a company’s business activities
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Detailed explanation-1: -Explanation: Backflush costing the costing method where all the transactions related to production and cost are recorded once the product is produced, completed, and sold to the consumer.
Detailed explanation-2: -Backflush costing is an accounting method that records costs after a good is sold or a service is completed. The backflush costing method uses a standard cost per unit and multiplies this cost by the number of units produced to determine the expense amount.
Detailed explanation-3: -Under the backflush costing method, raw materials are ordered only when required, and they are accounted for. Under the conventional costing method, labor and overhead are charged directly into WIP; then, they are moved to sequential processing, finished goods, and later to the costs of goods sold.