Two Divisions of a Company Decide to Use the Same

question 44

Multiple Choice

Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and to reduce the fixed costs assigned by corporate headquarters.This is an example of which of the following?

• A) Unrelated diversification strategy
• B) Concentration on a single business
• C) International expansion
• D) Focused differentiation strategy
• E) Synergy

Differentiate between job order costing and process costing with respect to their application scenarios.

Understand the flow of costs in job order costing, including the recording of transactions related to raw materials, labor, and overhead.

Identify the methods and agencies involved in computing essential economic indicators.

Understand the basic concepts and types of unemployment.

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Definitions:

Materials

Raw substances or components that are converted through the manufacturing process into finished goods.

Equivalent Units

A method in process costing that transforms units that are incomplete into an equivalent number of units that are considered fully completed.

Conversion Costs

Conversion costs are the combined costs of labor and overhead expenses required to convert raw materials into finished products.

Equivalent Units

Measures used in manufacturing to express the amount of work completed in terms of fully finished units during a given period.