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CA Intermediate · Cost and Management Accounting · Job Costing

Which of the following best describes the treatment of a job cost sheet in job costing?

A job cost sheet is prepared for each individual job and accumulates its direct material, direct labour, direct expenses and absorbed overheads. This gives the total and unit cost of that job, unlike process costing, which collects costs by process over a period.

  1. AIt accumulates direct material, direct labour, direct expenses and absorbed overheads for one specific jobCorrect
  2. BIt records the cost of a continuous production process for a whole month
  3. CIt records only the overheads of a service department
  4. DIt records the budgeted cost of all jobs combined for the year

Explanation

A job cost sheet is opened for each job and collects direct material, direct labour, direct expenses and absorbed overheads for that job. The option on continuous monthly process cost describes process costing, so it is wrong.

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