Which of the following statements accurately describes manufacturing cost flows in a just-in-time (JIT)environment?

Question

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In a JIT environment, the goal is to minimize inventory and maintain a smooth flow of goods through the production process. Therefore, there is little need to maintain raw materials, work-in-process, or finished goods accounts for long periods of time. Direct labour and overhead are immediately expensed as they are incurred, and the cost of goods sold account is still necessary to track the cost of production.

Which of the Following Statements Accurately Describes Manufacturing Cost Flows