Which lean accounting model assigns all manufacturing costs to Cost of Goods Sold and then subtracts inventory costs from the Cost of Goods Sold account?
A) Absorption costing
B) Backflush costing
C) Electronic Data Interchange
D) Value-added inventory accounting

Question

Quizplus · Accepted Answer

Under backflush costing, all costs of direct materials, direct labor and manufacturing overhead are assigned to cost of goods sold. If an inventory exists at the end of the year, costs are deducted from cost of goods sold and assigned to an appropriate inventory account.

Which Lean Accounting Model Assigns All Manufacturing Costs to Cost