Circle the letter for the best answer for each question (1 point each). 1. Which

Question

Circle the letter for the best answer for each question (1 point each).

1. Which of the following companies would most likely use job order costing?

A. A computer memory chip manufacturer

B. A sugar beet processor

C. An auto body repair shop

D. An oil refinery

2.

$12

$12

The per-unit amount of three different production costs for Onini, Inc., are as follows:

What type of cost are each of these three costs?
A. Cost A is fixed, Cost B is mixed, Cost C is variable.
B. Cost A is fixed, Cost B is variable, Cost C is mixed.
C. Cost A is variable, Cost B is mixed, Cost C is fixed.
D. Cost A is variable, Cost B is fixed, Cost C is mixed.

$12

$12

Explanation / Answer

Solution:

1.

The answer to the above question is -

C. an auto body repair shop.

As all the industies produce homogeneous products.

An auto body repair shop has different jobs in form of different customers and work. Thus, job order costing suits best to an auto body repair shop.

2.

The answer to the above question is-

C. Cost A is variable, Cost B is mixed and Cost C is fixed.

Cost A is variable as, at 10,000 it is 20 and ad 4,000 it is 5, Cost C does not change at any level of production thus Cost C is fixed

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