The Practice of Assigning Costs Evenly to Jobs Using a Single

question 13

Multiple Choice

The practice of assigning costs evenly to jobs using a single overhead rate when different jobs actually consume resources in different proportions is sometimes called:

• A)Smooth costing.
• B)Process costing.
• C)Activities-based costing.
• D)Peanut-butter costing.

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Definitions:

Variable Production Costs

Variable production costs are those costs that vary directly with the level of production output, such as raw materials and direct labor.

Traceable Fixed Advertising

Costs of advertising that can be directly associated with a specific product or segment of the business.

Fixed General Factory Overhead

Costs associated with operating a factory that do not vary with the level of production, such as factory rent, insurance, and salaries of managers.