The Flow of Costs in a Job Order Cost System

question 139

Multiple Choice

The flow of costs in a job order cost system

• A) involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.
• B) cannot be measured until all jobs are complete.
• C) measures product costs for a set time period.
• D) generally follows a LIFO cost flow assumption.

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Definitions:

Inventory Records

Documentation that keeps track of the quantities, locations, and values of a company's inventory, assisting in the management and control of stock.

FIFO Inventory Valuation

An accounting method for valuing inventory where the first items placed in inventory are the first ones sold, affecting cost of goods sold and ending inventory valuation.

Sales Revenue

The total amount of money generated from the sale of goods or services before any expenses are deducted.

Gross Profit

The income a business earns after subtracting the expenses involved in producing and selling its goods or delivering its services.