Backflush costing provides reasonably accurate product costs if materials inventories are ________.

Question

Quizplus · Accepted Answer

Backflush costing works best when materials inventories are low and production cycle times are short. With low inventories, it is easier to track materials usage when they are immediately consumed in production, rather than being held in inventory for a longer period of time. With short production cycle times, the system can generate accurate product costs by tracking materials and labor usage at the end of each production cycle. High inventories and long production cycle times can result in inaccuracies in the costs calculated by backflush costing.

Backflush Costing Provides Reasonably Accurate Product Costs If Materials Inventories