which of the following is FALSE concerning an operations-costing system? please
ID: 2586318 • Letter: W
Question
which of the following is FALSE concerning an operations-costing system? please explain why you chose that answer.
a)it has characteristics of a job costing system and of a process costing system
b)within each operation, all product units are treated exactly alike with respect to conversion costs
c) direct materials that are unique to different work orders, are specifically identified with the approciate work order, as in job costing
d) work orders are used to specify direct materials and step by step operations
e)a seperate conversion cost is calculated for each work order, as in job costing
Explanation / Answer
e) a seperate conversion cost is calculated for each work order, as in job costing
The above statement is false for an operation costing system.
The reason is in operation costing it is assumed that for a particular operation, same amount of conversion cost is used by a single unit and therefore a single average unit conversion cost used to calculate the conversion cost of all the units produced by a given operation.
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