Accounting in a JIT environment charges all costs directly to Cost of Goods Sold and charges them to Inventory accounts when needed using which of the following costing methods?

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Quizplus · Accepted Answer

Backflush costing is a method used in JIT environments where costs are not assigned to specific products until production is completed. Instead, all costs are charged directly to Cost of Goods Sold, and then at the end of the production process, the system "flushes" the costs back into the appropriate inventory accounts based on the quantities produced. This method is efficient and eliminates the need for tracking costs on individual products.

Accounting in a JIT Environment Charges All Costs Directly to Cost