A Major Difference Between Job Order Costing and Process Costing

question 35

True/False

A major difference between job order costing and process costing is the treatment of nonmanufacturing costs.

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Definitions:

Finished Goods

Inventory items that have completed the manufacturing process and are ready for sale to customers.

Direct Labor Cost

The expense related to the work of employees directly involved in the production of goods or services, such as wages for assembly line workers.

Direct Labor-Hours

Direct labor-hours are the total number of hours worked by employees directly involved in the manufacturing process, used as a basis for assigning labor costs to products.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services and are a major component of product costs.