A Job Order Costing System Would Best Fit the Needs

question 30

Multiple Choice

A job order costing system would best fit the needs of a company that makes:

• A) Custom machinery.
• B) Cement.
• C) Shoes and apparel.
• D) Pencils and erasers.
• E) Paint.

---

Definitions:

Direct Labor Budget

A financial plan that forecasts the costs associated with the labor directly involved in the production of goods or services.

Direct Labor-Hour

A metric indicating the total hours worked by employees directly involved in the production process, often used for costing purposes.

Labor Rate

The amount paid to an employee per unit of time, usually per hour or year.

Direct Materials Purchase Budget

A financial plan that estimates the quantities and costs of direct materials to be purchased to meet production requirements.