One of the Primary Differences Between Job Costing for Service

question 37

Multiple Choice

One of the primary differences between job costing for service firms and job costing for manufacturing companies is service firms generally:

• A) use fewer direct materials.
• B) have less direct labor.
• C) do not use predetermined overhead rates.
• D) have no Work-in-Process Inventory.

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Definitions:

Permanent Tax

A concept in fiscal policy describing taxes that are intended to be implemented indefinitely or without a predetermined end date.

Aggregate Demand

The total market demand for goods and services within an economy at a fixed price level over a certain time period.

Crowding-Out Effect

The offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending.

Government Spending

The total amount of money that a government expends on public services, social welfare programs, infrastructure, and defense, among other areas.