Backflush costing:
A)Is a simplified approach to determining product cost that is used when there is little or no work-in-process inventory.
B)Works when there is a lot of work-in-process inventory.
C)Is a complex method.
D)Is a complex approach to determining product cost that is used when there is little or no work-in-process inventory.

Question

Quizplus · Accepted Answer

Backflush costing is a simplified approach used when there is little or no work-in-process inventory. It is typically used in just-in-time (JIT) production systems where inventory levels are kept low, and products are only produced when needed. The cost of each product is calculated based on the materials used and the number of units produced, rather than the traditional method of tracking individual costs throughout the production process.

Backflush Costing