Hugley Corp.recently installed three just-in-time work areas in its blank key-making division.The work areas will make large quantities of identical key blanks for door lock manufacturers.Select the best answer for how Hugley should run its business and account for product costs.
A)Backflush costing
B)ABC
C)JIT and ABM
D)ABC and backflush costing

Question

Quizplus · Accepted Answer

Backflush costing is most suitable for Hugley Corp.'s situation because it simplifies the accounting process in environments where production is highly standardized and uses just-in-time (JIT) systems. This method delays the recording of costs until the goods are finished, which aligns well with the continuous and streamlined production of identical key blanks.