Job-Order and Process Cost Systems Are Two Different Costing Systems

question 6

True/False

Job-order and process cost systems are two different costing systems that a company chooses between based on the preference of management.

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Definitions:

Cannibalization

The decline in the number of units sold, income, or market control of a product following the release of a new product by the same company.

MR

Marginal Revenue, the change in total revenue that results from selling one additional unit of a product or service.

MC

The additional cost of producing one more unit of a product or service, known as marginal cost.

Substitute Brands

Brands that offer products or services which consumers may use in place of each other based on preference, price, or availability.