A Job Order Cost System and a Process Cost System

question 121

True/False

A job order cost system and a process cost system are two alternative methods for valuing inventories.

---

Definitions:

Variable Manuf. Overhead

Indirect, variable costs incurred during the manufacturing process, excluding direct labor and direct materials.

Labour Efficiency Variance

The difference between the actual labor hours used and the standard labor hours expected, multiplied by the standard labor rate.

Direct Labour Used

The total effort, measured in hours or costs, of workers directly involved in the manufacturing process of a product.

Variable Manuf. Overhead

Costs that vary with production volume, such as utilities and materials used in manufacturing.