Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Merchandising Company vs. Manufacturing Company

Financial Accounting

5. Inventory

Merchandising Company vs. Manufacturing Company

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Multiple Choice

Companies that make many different products each period typically use which type of costing system?

Standard costing

Job-order costing

Activity-based costing

Process costing

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Verified step by step guidance

Understand the nature of the problem: The question is asking about the type of costing system used by companies that produce many different products in each period.

Review the characteristics of each costing system mentioned: Standard costing, Job-order costing, Activity-based costing, and Process costing.

Focus on Job-order costing: This system is typically used when companies produce unique or customized products in small batches, as it allows costs to be assigned to specific jobs or orders.

Compare Job-order costing with other systems: For example, Process costing is used for mass production of identical products, while Activity-based costing allocates costs based on activities rather than jobs, and Standard costing involves pre-determined cost estimates.

Conclude that Job-order costing is the most appropriate system for companies producing many different products each period, as it tracks costs for individual jobs or orders.