Which of the Following Statements Best Defines an Operation Costing

question 72

Multiple Choice

Which of the following statements best defines an operation costing system?

• A) It is identical to a process costing system except that actual manufacturing overhead costs are traced to units of product.
• B) It is the same as a process costing system except that direct materials costs are accounted for in the same way as in job-order costing system.
• C) It is the same as a job-order costing system except that direct materials costs are accounted for in the same way as in a process costing system.
• D) It is identical to a job-order costing system except that actual manufacturing overhead costs are traced to units of product.

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Definitions:

Capital Structure

The composition of a company’s debt and equity used to finance its overall operations and growth.

Market Risk Premium

The additional return an investor requires from a market portfolio over the risk-free rate, compensating for the risk of the investment.

Financial Leverage

The use of borrowed funds to increase the potential return on an investment.

Shareholder Leverage

The use of borrowed funds by shareholders to increase their potential returns from an investment.