CA Intermediate · Cost and Management Accounting · Job Costing
Which of the following is the most appropriate basis on which a job costing system collects cost?
Job costing collects cost for each separate customer order or work order, which is treated as the cost unit. This suits non-standard, made-to-order work. Costing by continuous process or by monthly totals of identical units belongs to process or batch methods instead.
- AEach separate customer order or work order, which is treated as a distinct cost unitCorrect
- BEach continuous process through which the output flows
- CEach month's total production of identical units
- DEach department's total expenditure irrespective of the order
Explanation
Job costing is used where work is done to a customer's specific order, so costs are accumulated for each job. Process costing, by contrast, accumulates cost by process for continuous, homogeneous output. Departmental totals are used for overhead, not as the job cost unit.
Did you get it right without looking?
One question tells you little. A timed set on Job Costing shows your real accuracy, how long you take and where you lose marks.
More Job Costing questions
- Kaveri Fabricators absorbs factory overheads on direct labour hours. Budgeted factory overheads for the year are ₹6,00,000 and budgeted dire…
- In a job costing system, which document is the primary source for charging the cost of direct materials issued from the stores to a specific…
- Mehta Engineers quotes prices at cost plus 25% profit on selling price. The cost of Job 31 is estimated at Rs 1,80,000. What quotation price…
- Sharma Fabricators uses a machine-hour overhead rate. Budgeted factory overheads for the year are Rs 7,20,000 and budgeted machine hours are…
- Which of the following best describes the treatment of a job cost sheet in job costing?
- Which of the following best describes a job cost sheet in a job costing system?