Under mass production, at the end of the period:
A) The production line is stopped so that all units are completed to reduce accounting problems
B) Some units will be partially complete, and conversion costs and direct material costs need to be assigned to them
C) The books cannot be closed because the production never stops
D) All of the units that are not complete are counted as 100% complete to reduce bookkeeping problems

Question

Quizplus · Accepted Answer

Under mass production, it is likely that some units will be partially complete at the end of the period. Therefore, conversion costs and direct material costs need to be assigned to them. The production line does not necessarily have to be stopped to do this, but the accounting records of these partial units need to be accurately reflected in the financial statements. Choices A and D are not accurate as they suggest solutions to reduce accounting or bookkeeping problems that may result in misleading financial statements. Choice C is also not accurate as the books can still be closed, but adjustments may need to be made to account for the partially completed units.

Under Mass Production, at the End of the Period