In Job Order Cost Accounting System Used by a Service

question 37

Multiple Choice

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

• A) Materials
• B) Direct labor
• C) Rent
• D) Supplies

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Definitions:

Cost Curves

Graphs that depict how the costs of production vary with changes in output, including total cost, average cost, and marginal cost curves.

Profit-maximizing

The method or tactic of modifying output and setting prices to maximize profits.

ATC

It refers to dividing the entire cost of production by the number of units produced to get the Average Total Cost.

AVC

The variable cost for each unit of production, known as Average Variable Cost.