Which of the Following Statements Concerning Cost Accounting for Service

question 46

Multiple Choice

Which of the following statements concerning cost accounting for service type businesses is correct?

• A) Cost accounting is not used in service business.
• B) Cost information is needed for different reasons in a service business than in a manufacturing business.
• C) To determine the rate at which direct labour costs are applied to a particular job a labour cost per hour is developed for each employee.
• D) Actual costs rather than budgeted costs are used to determine overhead application rates.

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Definitions:

Controllable Variance

The difference between actual and expected outcomes that can be directly managed or influenced by a responsible party.