Operation Costing Is a Hybrid Costing System for Products and Services

question 102

Multiple Choice

Operation costing is a hybrid costing system for products and services that uses:

• A)Job costing to assign direct material costs and standard costing for conversion cost.
• B)Process costing to assign conversion costs and normal costing for materials cost.
• C)Job costing for direct materials costs and process costing for conversion cost.
• D)Normal costing for conversion cost and process costing for materials cost.

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Definitions:

Expected Total Utility

The total satisfaction or benefit that a consumer expects to receive from consuming a particular quantity of goods and services.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1.

Fair Insurance Policy

An insurance contract that is both equitable to the insurer and insured, ensuring that the terms and conditions are just and reasonable to all parties involved.

Premium

The amount paid periodically to the insurer by the insured for covering his risk.