During an Accounting Period,job Costs Are Computed on an Ongoing

question 225

Multiple Choice

During an accounting period,job costs are computed on an ongoing basis by the use of:

• A)overallocated indirect-cost rates.
• B)actual allocation rates.
• C)underallocated indirect-cost rates.
• D)budgeted indirect-cost rates.

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Definitions:

Equivalent Units

A concept in cost accounting used to assess work-in-process inventory by converting partial units into a number of equivalent full units.

Ending Inventory

The worth of merchandise ready for purchase at the close of a financial period, determined by adding purchases to the initial inventory and then subtracting the cost of goods that were sold.

First-In, First-Out Method

An inventory valuation method where the earliest items added to inventory are the first ones considered sold.

Equivalent Units

A measure used in process costing that converts partially completed goods into an equivalent number of fully completed units.