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A Law Firm Would Use a Job Order Cost System

question 28

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A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.


Definitions:

Fixed Cost

Costs that do not vary with the level of output or production, such as rent, salaries, and insurance premiums.

Average Total Cost

The total cost of production divided by the number of units produced, representing the per-unit cost of production.

Marginal Cost

Indicates the change in total production cost that arises when the quantity produced is increased by one unit.

Output

The overall production of goods and services by a business or the entire economy.

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