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:

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead costs.

Direct Labor Usage

The total amount of labor directly involved in the manufacturing process, often used in calculating production costs and efficiency.

Factory Wages Payable

An account representing the amounts owed to manufacturing personnel for wages that have been earned but not yet paid.

Work in Process Inventory

Goods in manufacturing that are partially completed; not yet ready for sale but more advanced than raw materials.