Which of the following statements is true regarding by-products or scrap?
A)Process costing is the only method that should result in by-products or scrap.
B)Job order costing systems will never have by-products or scrap.
C)Job order costing systems may have instances where by-products or scrap result from the production process.
D)Process costing will never have by-products or scrap from the production process.

Question

Quizplus · Accepted Answer

Job order costing systems may have instances where by-products or scrap result from the production process. This can occur when a job or project requires a certain amount of raw materials, but the actual amount needed may be less than what was initially purchased. The excess or leftover material may become a by-product or scrap that can be sold or reused in other production processes.

Which of the Following Statements Is True Regarding By-Products or Scrap