The Flow of Services and Costs in Service Companies Which one of the following statements is false?

a. Service companies use predetermined overhead rates.

b. Regarding the accounting for cost of “goods” sold, service companies are more similar to merchants than to manufacturers.

c. Service companies use work-in-process inventory accounts to accumulate costs such as direct labor and manufacturing overhead.

d. A service business is any organization whose main economic activity involves producing a nonphysical product.