What Is Important to Recognize When Comparing the Cost-Benefit Considerations

question 82

Multiple Choice

What is important to recognize when comparing the cost-benefit considerations of job versus process costing?

• A)Job costing provides less detailed information than process costing and job costing costs more to implement than process costing.
• B)Job costing provides less detailed information than process costing and job costing costs less to implement than process costing.
• C)Job costing provides more detailed information than process costing and job costing costs less to implement than process costing.
• D)Job costing provides more detailed information than process costing and job costing costs more to implement than process costing.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance costs.

Operating Income

An indication of a company's profitability from its core business operations, excluding income and expenses from unusual, non-operational activities.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, contributing to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change in total despite fluctuations in the level of output or sales volume, such as rent or salaries.