CA Intermediate · Cost and Management Accounting · Job Costing
Which statement about job costing is correct?
In job costing each job is separately identifiable, usually made to a customer's order, so costs are accumulated job by job. Continuous production of identical items is the domain of process costing, and repair work is a typical use of job costing.
- AIt is suitable where production is continuous and products are identical
- BEach job is separately identifiable and costs are accumulated job-wiseCorrect
- CCosts are averaged over all units produced in a period
- DIt cannot be used for repair and maintenance work
Explanation
Job costing applies where work is done to customer specifications and each job is distinct, so costs are collected job by job. Continuous identical production suits process costing, and averaging suits process or unit costing. Repair work is a common application of job costing.
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