Just-in-time management systems often employ what is called "backflush costing." Under this accounting approach, work-in-process inventories are valued at:
A) The sum of traceable costs.
B) The sum of products of unit costs and equivalent units of material and conversion.
C) Zero.
D) The sum of direct material, direct labor, and applied overhead costs.

Question

Quizplus · Accepted Answer

Backflush costing simplifies the accounting process by eliminating the need to track work-in-process inventories, effectively valuing them at zero. This method is aligned with just-in-time systems that minimize inventory levels.

Just-In-Time Management Systems Often Employ What Is Called "Backflush Costing