ECONOMICS

Detailed explanation-1: -Normally a job cost sheet is not prepared for a job until after the job has been completed. When the predetermined overhead rate is based on direct labour-hours, the amount of overhead applied to a job is proportional to the amount of actual direct labour-hours incurred on the job.

Detailed explanation-2: -Job order costing is a costing method which is used to determine the cost of manufacturing each product. This costing method is usually adopted when the manufacturer produces a variety of products which are different from one another and needs to calculate the cost for doing an individual job.

Detailed explanation-3: -A job order cost sheet accumulates the costs charged to a specific job. It is used within a job costing system. This cost sheet is most commonly compiled for single-unit or batch-sized production runs.

Detailed explanation-4: -Once a job is completed, the total costs assigned to the job are transferred from work‐in‐process inventory to finished goods inventory. Once the job is sold and delivered, the job costs are transferred from finished goods inventory to cost of goods sold.