Which of the Following Statements Is(are) True Regarding Product Costing

question 45

Multiple Choice

Which of the following statements is(are) true regarding product costing?
(A) A job is a cost object that can be easily and conveniently distinguished from other cost objects.
(B) Job cost sheets are used in accounting systems as a subsidiary ledger for the Work-in-Process account.

• A) Only A is true.
• B) Only B is true.
• C) Both of these are true.
• D) Neither of these is true.

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Definitions:

Direct Labor

This refers to the wages and other costs for labor directly involved in the production of goods or the provision of services, not including indirect labor costs such as maintenance.

Differential Profit

The difference in profit between two alternative decisions or time periods.

Allocated Fixed Costs

Fixed costs that are assigned to a specific department, project, or segment of a business.

Discontinuing

The process of ending the production and sales of a product line, business segment, or an entire business.