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:

Net Sales

Total sales revenue minus returns, allowances, and discounts, representing the actual revenue earned from sales.

Gain On Sale

The profit that is realized from the sale of an asset or investment, which exceeds the purchase price.

Interest Expense

The expenditure on borrowed funds that an entity bears over a certain period.

Purchase Returns And Allowances

Transactions where a buyer returns goods to the seller or receives a reduction in the purchase price for unsatisfactory goods.