Match each phrase that follows with the term (a-h) it describes.
-Costing system used by a company producing custom window treatments
A)Direct labor and factory overhead
B)Direct labor and direct materials
C)Transferred-in costs
D)Equivalent units
E)Process costing
F)Job order costing
G)First-in, first-out method
H)Cost of production report

Question

Quizplus · Accepted Answer

Job order costing is used for custom-made products, such as custom window treatments.

Answer: B
 Direct labor and direct materials are the two main components of the cost of goods sold for manufacturing companies.

Answer: F
 This phrase also pertains to job order costing.

Answer: C
 Transferred-in costs refer to the costs of products or services that were started in one department but finished in another department within the same company, and are a part of process costing.

Answer: E
 Process costing is used when there is a continuous flow of identical units produced, such as in the manufacturing of mass-produced goods like soda or laundry detergent.

Answer: G
 The first-in, first-out (FIFO) method means that the oldest inventory is sold first.

Answer: D
 Equivalent units refers to the units of output that are partially completed but have not yet been finished, which is important in determining the cost of production.

Answer: H
 A cost of production report shows the cost of producing goods, including the amount of direct labor, direct materials, and overhead required to complete production.

Match Each Phrase That Follows with the Term (A-H) It