A Materials Requisition in a Job-Order Costing System Is Used

question 95

Multiple Choice

A materials requisition in a job-order costing system is used as a:

• A) Source document for assigning costs to individual departments.
• B) Subsidiary account for recording the materials used on each job.
• C) Request form for getting the necessary materials from the materials storeroom.
• D) Means of ordering materials from outside suppliers.

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Definitions:

AFC

Average fixed cost, or the total fixed costs divided by the quantity of output produced, indicating how fixed costs per unit change with production levels.

MC

The additional cost incurred for producing one more unit of a good or service; it's synonymous with marginal cost.

Marginal Cost

is defined as the increase in total production cost that arises from producing an additional unit of a good or service.

TVC

Total Variable Costs, which are the sum of expenses that vary directly with the level of production or business activity.