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CMA Intermediate · Cost Accounting · Job Costing

Which of the following best describes a feature of job costing as applied in a custom furniture workshop in Jaipur?

Job costing accumulates costs separately for each customer order, with the job as the cost unit. It suits custom work like made-to-order furniture, because each order is distinct. Averaging over processes or per-kilometre costing belongs to other methods.

  1. ACosts are accumulated separately for each customer order and the job is the cost unitCorrect
  2. BCosts are accumulated department-wise for a continuous flow of identical units
  3. CCosts are accumulated for each process and averaged over equivalent units
  4. DCosts are accumulated per kilometre of service rendered

Explanation

Job costing is used where work is done to customer specifications and each order is distinct. The job is the cost unit and costs are collected on a job cost sheet. Process costing averages costs over continuous identical output, and per-kilometre costing belongs to operating costing.

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