Pricing of Services

question 107

Multiple Choice

Pricing of services

• A)requires the same approach as pricing of products.
• B)uses a markup percentage to add the cost of overhead to the direct costs of labor,materials,and parts.
• C)always requires three pricing computations,one for materials,one for parts,and one for labor.
• D)is less accurate than pricing of products.

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Definitions:

Subsidiary Account

An individual account that records transactions related to a specific component, often used within a larger accounting system.

Raw Materials Inventory

Refers to the total cost of all the materials that are currently in stock and have not yet been used in the production process.

Factory Labor

Work performed by employees in a manufacturing setting, directly involved in producing goods.

Control Account

A summary account in the general ledger that aggregates the details held in a subsidiary ledger for easier oversight and reconciliation.