Which of the following statements is true of a backflush costing system?
A) All costs are tracked sequentially as products pass through each stage of production.
B) When inventories are minimal, as in JIT production systems, backflush costing complicates costing systems.
C) Usage of a backflush costing system can result in incomplete accounting records.
D) Backflush costing increases the ability of the accounting system to pinpoint the uses of resources at each step in the production process.

Question

Quizplus · Accepted Answer

Backflush costing can result in incomplete accounting records because it delays recording costs until after production is completed, which may omit detailed tracking of costs through each production stage.

Which of the Following Statements Is True of a Backflush