COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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similar goods are being produced.
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large volumes are produced.
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jobs have distinguishing characteristics.
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a series of connected manufacturing processes is necessary.
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Detailed explanation-1: -In summary, the basic characteristics of job order costing are: (a) Comprises of products or services that are different from each other. (b) Costs are pooled according to the job. (c) Unit cost is calculated by dividing the total job cost with the unit produced for that particular job.
Detailed explanation-2: -(i) Flow of material and parts form one location to another is intermittent or discontinuous. (ii) Mechanization and division of labor is not economical. quantity.
Detailed explanation-3: -Types of business that use job costing system A business that applies costing method usually has the following characteristics: Production is carried out based on the customer’s specification. Products are manufactured in distinguishable lots. Products produced are of not uniform nature.
Detailed explanation-4: -The features of process costing employed in industries are: (1) Production is continuous, in a series of stages called processes. (2) Each process is deemed as a cost centre and costs are accumulated for each process separately along with output, finished and in progress. (3) Products and processes are standardised.