COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following are characteristics of job order costing, except:
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Products are made according to consumer demand.
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Similar products are produced continuously.
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Costs are tracked or allocated to jobs.
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Explanation:
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: -It accumulates costs for each department within the factory, is not a characteristic of a job order costing system.
Detailed explanation-3: -Job order costing requires the assignment of direct materials, direct labor, and overhead to each production unit.
Detailed explanation-4: -Both process costing and job-order costing assign production costs to units of output.
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