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ACCA Applied Knowledge · Management Accounting · Cost accounting methods

At the end of a period, Job 12 has been started but not completed. In job costing, how should the costs accumulated on Job 12 be treated?

The accumulated costs of the unfinished job are included in work-in-progress inventory. They are carried forward as an asset until the job is completed and sold, so they are not charged to profit or loss in the period.

  1. AIncluded in work-in-progress inventoryCorrect
  2. BCharged to profit or loss as a period cost
  3. CAdded to the cost of the next completed job
  4. DTreated as non-production overhead

Explanation

Costs of incomplete jobs are carried forward as work-in-progress, an asset, until the job is completed and sold. They are not expensed in the period.

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