A Job That Shows Low Profitability May Be the Result

question 46

Multiple Choice

A job that shows low profitability may be the result of all of the following except:

• A)inefficient use of direct materials.
• B)inefficient direct manufacturing labor.
• C)overpricing the job.
• D)over-allocating overhead costs.

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Definitions:

Balance Sheet

A financial statement that shows the assets, liabilities, and equity of a company at a specific point in time, illustrating its financial position.

Income Statement

A report that outlines an organization's earnings and costs for a set period, culminating in a net gain or shortfall.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs, such as utilities and rent for the factory.

Indirect Labor

Labor costs of workers who assist in or facilitate the manufacturing process but do not directly work on the product.