Which of the Following Is a Reason Why a Job

question 86

Multiple Choice

Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer?

• A)The cost incurred for each job will differ as per the order specifications.
• B)The direct costs incurred for each job are the same, only indirect costs vary.
• C)The raw materials used have already been accounted for using process costing.
• D)The products are sold to different customers.

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Definitions:

Variable Manufacturing Overhead

Overhead expenses in manufacturing that change in proportion to the amount of production activity.

Raw Materials

The basic materials from which products are manufactured or made.

Quantity Variance

The difference between actual quantity of material or labor used in production and the expected quantity, often leading to cost variations.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating labor and overhead costs.