121_CH_12Qs - CHAPTER 12 JOB COSTING QUESTIONS 12-1 The...

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CHAPTER 12: JOB COSTING - QUESTIONS 12-1 The purpose of any product costing system is to (1) determine product and service cost, and value inventory, (2) help with management planning, cost control, and performance evaluations, and (3) help managerial decision making. 12-2 Management can use product costs to determine the product or service pricing, to assess the financial effect of adding or deleting a product, division or subsidiary, to evaluate a make or buy decision, and to evaluate department or division product profitability performance. 12-3 Job costing is a product costing system that accumulates and assigns costs to a specific job. Process costing accumulates product or service costs by process or department and then assigns them to a large number of nearly identical products. 12-4 Companies that are likely to use a job costing system have a wide variety of products or services. These companies include printing shops, accounting firms, equipment companies, and construction companies. Companies that are likely to use a process costing system have homogeneous products or services. Such companies include automobile manufactures, food processors, and textile companies.
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