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Chapter 4 Job Costing

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CHAPTER 4
JOB COSTING

TRUE/FALSE

1. Direct costs are allocated to the cost object using a cost-allocation method.

Answer: False Difficulty: 1 Objective: 1 Terms to Learn: cost-allocation base Indirect costs are allocated to the cost object using a cost-allocation method.

2. Quality control costs may be a direct cost of the Manufacturing Department, but an indirect cost of an individual job.

Answer: True Difficulty: 2 Objective: 1 Terms to Learn: job

3. Cost objects may be jobs, products, or customers.

Answer: True Difficulty: 1 Objective: 1 Terms to Learn: job

4. The cost driver of an indirect cost is often used as the cost-allocation base.

Answer: True Difficulty: 1 Objective: 1 Terms to Learn: cost-allocation base

5. A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

Answer: True Difficulty: 2 Objective: 2 Terms to Learn: job-costing system, process-costing system

6. Job costing is commonly used to estimate costs in beverage production.

Answer: False Difficulty: 1 Objective: 2 Terms to Learn: job-costing system, process-costing system Process costing is commonly used to estimate costs in beverage production.

7. In a job-costing system the cost object is an individual unit, batch, or lot of a distinct product or service.

Answer: True Difficulty: 1 Objective: 2 Terms to Learn: job-costing system
8. Actual costing is a method of job costing that allocates an indirect cost based on the actual indirect-cost rate times the actual quantity of the cost-allocation base.

Answer: True Difficulty: 1 Objective: 2 Terms to Learn: actual costing

9. Process costing is used to assign manufacturing costs to unique batches of a

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