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CA Intermediate · Cost and Management Accounting · Job Costing

In a job costing system, which document is normally used to accumulate the direct materials, direct labour and overheads charged to a specific job, so that its total cost can be ascertained on completion?

The job cost sheet is used. It is opened for each job and accumulates direct materials, direct labour, direct expenses and absorbed overheads, so total job cost is known at completion. The other documents each serve a narrower purpose, such as listing, issuing or tracking materials.

  1. ABill of materials
  2. BJob cost sheetCorrect
  3. CMaterial requisition note
  4. DBin card

Explanation

The job cost sheet (job cost card) is opened for each job and records all direct materials, direct labour, direct expenses and absorbed overheads, giving the total cost on completion. A bill of materials only lists the materials required, a requisition note authorises issue of materials, and a bin card records stock movement of one material.

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