Which of the Following Is Not a Difference in a Job-Cost

question 2

Multiple Choice

Which of the following is not a difference in a job-cost environment and a process-cost environment?

• A)In a job-cost environment, only physical units are computed whereas in a process cost environment, equivalent units are computed.
• B)In a job-cost environment, firms compute a predetermined rate for overhead costs alone as these are the only costs that the firm allocates whereas in a process cost environment a firm must also allocate the cost of materials and conversion.
• C)A job-cost environment is appropriate for firms that produce customized products in small amounts whereas a process-cost environment is suitable in settings that involve mass production of like products.
• D)In a job-cost environment, costs are assigned only to finished goods and cost of goods sold whereas in a process-cost environment costs are assigned to work-in-process, finished goods, and cost of goods sold.
• E)All of the above are differences in a job-cost environment and a process-cost environment.

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Definitions:

Risk Premium

The additional return expected by an investor for holding a risky asset, over and above the risk-free rate.

Semi-Strong Form

A form of the Efficient Market Hypothesis suggesting that stock prices reflect all publicly available information, making it impossible to consistently achieve higher returns.

Strong Form Efficient

A hypothesis stating that all information, both public and private, is completely reflected in stock prices, meaning no investor can achieve higher returns with specific information.

Weak Form Efficient

A market efficiency theory stating that all past trading information is already reflected in stock prices, and that technical analysis cannot consistently produce excess returns.