For Which Situation(s) Below Would an Organization Be More Likely

question 93

Multiple Choice

For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?

• A) a steel factory that processes iron ore into steel bars
• B) a factory that processes sugar and other ingredients into black licorice
• C) a costume maker that makes specialty costumes for figure skaters
• D) all of these

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Definitions:

Pro Forma

A method of calculating financial results using hypothetical income and expenses, often used for planning or projective statements.

Financial Planning

The process of framing objectives, policies, procedures, budgets, and financial forecasts for a specific time frame.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits while maintaining a consistent return on equity and without raising additional equity financing.

External Financing

Funds raised from outside the business, e.g., through borrowing or issuing equity.