When Perpetual Inventories Are Maintained in a Job Order Cost

question 42

Multiple Choice

When perpetual inventories are maintained in a job order cost system, the balance of the Work in Process Inventory account represents:

• A)the actual costs for the labor and materials used in uncompleted jobs and estimate of the overhead associated with these jobs.
• B)the actual costs incurred for labor, materials, and overhead on all jobs that were started but are not yet complete.
• C)only the actual costs for the labor and materials used in uncompleted jobs.
• D)only the actual costs for the labor and materials used in completed jobs.

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Definitions:

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, a fundamental concept in economics.

Real Cost

The total cost of manufacturing or providing a service, including all direct and indirect costs.

Marginal Cost

The cost of producing an additional unit of a product, highlighting the concept of increment in total cost with an increase in production.

Tuition

The fee that educational institutions charge for instruction.