Define a job order costing system and list two types of businesses that would use a job order costing system.
What will be an ideal response?
A job order costing system is an accounting system that accumulates costs by job. Businesses that would use a job order costing system include accounting firms, music studios, health care providers, building contractors, and custom furniture manufacturers.
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Indicate whether the statement is true or false
Matrix structure is especially useful when organizations undertake complex projects
Indicate whether the statement is true or false.
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one outflow followed by a series of inflows.
A. One drawback of the regular payback for evaluating projects is that this method does not properly account for the time value of money. B. If a project's payback is positive, then the project should be rejected because it must have a negative NPV. C. The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem. D. If a company uses the same payback requirement to evaluate all projects, say it requires a payback of 4 years or less, then the company will tend to reject projects with relatively short lives and accept long-lived projects, and this will cause its risk to increase over time. E. The longer a project's payback period, the more desirable the project is normally considered to be by this criterion.