Which of the Following Is True of Job Order Cost

question 64

Multiple Choice

Which of the following is true of job order cost systems?

• A) Examples of companies that use job order cost systems would be oil refineries, paper producers, chemical processors, and food processors.
• B) Job order cost systems are not widely used.
• C) Job order cost systems are often used by companies that manufacture custom products for customers or batches of similar products.
• D) Job order cost systems provide product costs for each manufacturing department or process.

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Definitions:

Profit

The financial gain realized when the revenue earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.

Marginal Cost

The extra expense resulting from the manufacture of an additional unit of a product or service.

Competitive Price-Taker

A market participant who cannot influence the price on the market but instead must accept the prevailing market price.