Process Costing Is ________

question 104

Multiple Choice

Process costing is ________.

• A) used to enhance employees' job satisfaction
• B) used by businesses to price unique products or identical products produced in batches
• C) used by businesses to price identical products
• D) used by businesses when manufacturing goods above normal capacity

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as selling, general, and administrative expenses.

Opportunity Cost

The cost of forgone alternatives when one option is chosen over another.

Administrative Expense

Costs related to the general operation and administration of a business, including salaries of executive personnel, office supplies, and utilities.

Direct Labor Cost

The total cost of wages paid to labor directly involved in the production of goods or services.