Match Each Business That Follows to the Type of Costing

question 85

Multiple Choice

Match each business that follows to the type of costing system (a or b) it would typically use.
-Paper manufacturer

• A)Job order costing
• B)Process costing

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Definitions:

Inventory Costing

The method of accounting that determines the value of a company's inventory, taking into account the costs of acquiring, producing, and other costs associated to bring the inventory to its current condition and location.

Cost of Goods Sold

An accounting term denoting the direct costs attributable to the production of goods sold by a company.

FIFO

"First In, First Out," an inventory valuation method where the goods first added to inventory are the first to be sold.

Gross Profit Method

An estimating technique used to calculate inventory cost, based on the gross margin and cost of goods sold.