Question

QUESTION 32 The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the manufacturing overhead cost applied to the job. True 2.157 points False QUESTION 33 An activity in activity-based costing is an event that causes the consumption of overhead resources. True 2.857 False QUESTION 34 If a company has a great deal of product diversity, activity-based costing will generally yield less accurate product costs than traditional methods based on direct labor or machine hours. True False

Answer 1

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Answer.32

True.

Job order costing is a costing method which is used to determine the cost of manufacturing each product. This costing method is usually adopted when the manufacturer produces a variety of products which are different from one another and needs to calculate the cost for doing an individual job. Job costing includes the direct labor, direct materials, and manufacturing overhead for that particular job.

Answer.33

True.

An activity in activity-based costing is an event that causes the consumption of overhead resources.

Activities consumes resources.

In activity-based costing an attempt is made to trace the costs of those activities directly to the products that cause them.

Answer.34

False.

Activity cost is better method.

The primary focus of traditional costing is the apportionment of overhead costs to the activities of production. Irrespective of the specific allocation of resources, traditional costing sets a single metric for every activity involved in production and allocates costs based on the consumption of that metric. Although, activity based costing is also used for cost allocation but it adopts a different approach. Under activity based costing, appropriate cost drivers are determined for every different activity and cost is then allocated according to these cost drivers.