If a Cost Object Such as a Product or Customer

question 11

Multiple Choice

If a cost object such as a product or customer has a negative red margin, then:

• A)its green margin will be positive.
• B)its green margin may be positive, negative, or zero.
• C)its green margin will be negative.
• D)its green margin will be zero.

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Definitions:

Production Departments

Divisions within a manufacturing company responsible for different stages of the production process, from raw materials to finished products.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries, not directly tied to production.

Customizing Department

A specialized department within a company focused on modifying and tailoring products to meet specific customer requirements.

Job-Order Costing System

An accounting system that assigns costs to specific jobs or batches and is used to determine the cost of manufacturing each order.