The Hondasaki Motorcycle Company has a normal two-stage absorption job-order costing system. They close over- or under-applied overhead directly into Cost of Sales, and use expected production as their activity base. Assume that their projections for total fixed costs and variable costs per unit are accurate. For the following change, taken independently and assuming nothing else changes, choose the best answer.

Taking on an additional job that is sold before the end of the period will:

The Hondasaki Motorcycle Company has a normal two-stage absorption job-order costing system. They close over- or under-applied overhead directly into Cost of Sales, and use expected production as their activity base. Assume that their projections for total fixed costs and variable costs per unit are accurate. For the following change, taken independently and assuming nothing else changes, choose the best answer.

Taking on an additional job that is sold before the end of the period will:

Have no effect on adjusted cost of sales

Reduce adjusted cost of sales

Impossible to predict without additional information

Increase adjusted cost of sales