Which of the following is not true about backflush costing?
A)Different companies may choose different trigger points.
B)Production costs are attached to products as they move through work in process.
C)A single account is used for raw and in-process materials because materials are issued to production when received from the supplier.
D)Direct labor is usually insignificant in a highly automated system,so is not cost effective to account for it separately.

Question

Quizplus · Accepted Answer

Backflush costing delays the costing process until the completion of goods and does not attach production costs to products as they move through work in process. Instead, it applies costs backward from the finished goods stage, simplifying the accounting process in environments with minimal work in process inventories, such as highly automated manufacturing systems.

Which of the Following Is Not True About Backflush Costing