The use of predetermined overhead rates in a job-order cost system makes it poss

Question

The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed. 2. The cost of goods sold in a single product company is equal to the number of units sold multiplied by their unit product cost, less any over-applied overhead or plus any under-applied overhead. 3. Period costs are expensed as incurred, rather than charged to jobs. 4. Under variable costing, fixed manufacturing overhead cost is treated as a product cost. 5. When production is less than sales for the period, absorption costing net operating income will generally be less than variable costing net operating income. 6. The salary of the treasurer of a corporation is an example of a common cost which normally cannot be traced to product segments. 7. Organization-sustaining activities are activities of the general organization that support specific products. 8. Costs classified as batch-level costs should depend on the number of batches processed rather than on the number of units produced, the number of units sold, or other measures of volume. 9. Activity-based costing is a costing method that is designed to provide managers with product cost information for external financial reports.

Explanation / Answer

1. True

2. True

3. False

4. True

5. True

6. False

7. False

8. True

9. True

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